Proxy advisory firm Institutional Shareholder Services Inc (ISS) has urged shareholders of Spirit Airlines Inc (SAVE.N) to vote for a proposed merger with Frontier Group Holdings Inc (ULCC.O).
“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 and made public on Saturday.
Spirit is the subject of a bidding war between Frontier and JetBlue Airways Corp (JBLU.O).
The proxy advisory firm last month asked Spirit shareholders to reject Frontier’s offer, saying JetBlue’s competing offer of $30 a share is superior from a financial standpoint.
Earlier this month, New York-based JetBlue sweetened its offer for Spirit by $2 to $33.50 per share in cash.
Spirit Airlines on Friday said that Frontier raised its cash offer by $2 per share to buy the airline and urged its shareholders to back a merger deal with Frontier at a meeting next week.
Spirit shareholders are due to vote on the merger deal with Frontier on June 30.
ISS also said the current offer from Frontier appears preferable as it 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.
Denver-based Frontier also increased its reverse termination fee to Spirit by $100 million to $350 million.
Florida-based Spirit has repeatedly rejected JetBlue’s offer, saying it has a low likelihood of winning approval from U.S. regulators.
However, JetBlue has been persistent and said it continued to believe its proposal was superior to Frontier’s adding that it will “more thoroughly” review and assess the revised terms of Frontier’s proposal.