Takeover target Spirit Airlines Inc. said on Tuesday it was in talks with JetBlue Airways Corp over a $3.4 billion sweetened offer and expects to decide on the proposal by the end of this month.
The ultra-low-cost airline has granted JetBlue access to the due diligence information being shared with Frontier Group Holdings Inc. after failing to secure enough shareholder support for its deal with the rival suitor.
Either of the deals will create the fifth-largest U.S. airline, helping the buyer compete with larger legacy players at a time when the industry faces labor and aircraft shortages.
Spirit had rebuffed a buyout proposal from JetBlue last month but later agreed to engage with it after the larger peer increased the reverse break-up fee by $150 million to $350 million, payable to Spirit shareholders in case the deal falls through due to antitrust reasons.
JetBlue Chief Executive Robin Hayes said last week he was optimistic about a deal.
Spirit, however, continues to be in talks with Frontier under the terms of an existing merger agreement.
The airline also said it was providing the information requested by the U.S. Department of Justice and the Federal Trade Commission for both the deals as part of an ongoing antitrust review process.
Spirit shares were up 1 percent at $21.40 before the bell, trailing JetBlue’s offer price of $31.50 per share.
