Spirit Just Got a Better Bid From Frontier. Its Stock Is Dropping.

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Spirit Airlines’ shareholders are set to vote on the Frontier deal on Thursday.

Daniel Slim/AFP via Getty Images


Spirit Airlines

stock was falling in premarket trading Monday after the Florida-based discount airline received a sweetened offer from rival


Frontier Group Holdings
.

Frontier (ticker: ULCC) bumped its offer for Spirit, adding an extra $2 per share in cash. It also said it would prepay $2.22 per share, and raised its breakup fee to $350 million, matching the termination fee


JetBlue

(JBLU) had offered.

Spirit reiterated its unanimous recommendation that Spirit stockholders vote for the merger agreement with Frontier. Last week. JetBlue (JBLU) had further sweetened its all-cash offer for Spirit to $33.50 per share, up from the $31.50 per share it had previously offered.

Spirit’s shareholders are set to vote on whether to accept the revised Frontier deal at a special meeting on Thursday. On Saturday, proxy advisory firm Institutional Shareholder Services recommended Spirit shareholders vote for a proposed merger with Frontier. “On balance, support for the merger with Frontier on the revised terms is warranted,” ISS wrote in a report that was published late Friday and made public Saturday, The Wall Street Journal reported.

Shares of Spirit fell 5.4% to $23.19 ahead of the market open on Monday.

Write to Lina Saigol at lina.saigol@dowjones.com

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