JetBlue is now offering Spirit Airlines a $350 million breakup fee in latest move in 3-way battle with Frontier

JetBlue Airways Corp. raised its offer for Spirit Airlines Inc. on Monday and urged the board to negotiate with it in good faith in the latest move in the three-way battle for the discount airline. Spirit has been trying to fight off the JetBlue bid so it can go ahead with an earlier plan to merge with Frontier Group Holdings Inc. and has said it fears a JetBlue deal would be blocked by regulators. The new JetBlue offer includes a $350 million reverse break-up fee payable to Spirit should the deal fail on antitrust grounds, up from an earlier offer of $200 million. JetBlue is offering to accelerate a prepayment of $1.50 a share in cash of the reverse breakup fee, which would be structured as a cash dividend to Spirit following a shareholder vote approving the deal. It is also raising its cash offer to $31.50 a share, comprised of $30 per share in cash at the closing and the above-mentioned $1.50 a share. “Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for crew members, and more value for stockholders,” JetBlue said in a letter to the Spirit board. Last week, Frontier said it would pay Spirit a $250 million break-up fee should regulators block their deal. Spirit shares jumped 7.3% premarket on the news, while JetBlue was down 0.8%. Frontier shares were not yet active. The U.S. Global Jets ETF has fallen 7% in the year to date, while the S&P 500 has fallen 13.8%.

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