Frontier Group’s latest offer for Spirit Airlines has the advisory firm Institutional Shareholder Services Inc (ISS) reversing its opinion about a deal.
ISS is now urging shareholders of Spirit Airlines to vote for a proposed merger with Frontier’s parent company.
That’s a change from a month ago when the advisory firm asked Spirit shareholders to reject Frontier’s offer, saying JetBlue’s competing offer of $30 a share is superior from a financial standpoint.
Since early April, Spirit has been the subject of a bidding war between Frontier and JetBlue Airways Corp.
“On balance, support for the merger with Frontier on the revised terms is warranted,” the proxy advisory firm said in a report published late Friday.
Spirit Airlines on Friday said that Frontier sweetened its offer, raising its cash offer by $2 per share and urged its shareholders to back a merger deal with Frontier at a meeting next week.
JetBlue had sweetened its offer for Spirit by $2 to $33.50 per share in cash, earlier this month.
A vote by Spirit shareholders on the merger with Frontier is set for June 30.
ISS said the current offer from Frontier matches the $2.00 increase in JetBlue’s offer price and also provides a higher prepayment of $2.22 per share compared to $1.50 per share from JetBlue.
Frontier also increased its reverse termination fee to Spirit by $100 million to $350 million.
Spirit has repeatedly rejected JetBlue’s offer on concerns about winning approval from U.S. regulators.