Frontier Airlines has sweetened its offer to combine with fellow budget carrier Spirit, less than a week before Spirit shareholders are set to vote on the deal.
The new offer for $4.13 per share, $2 per share higher than Frontier's original cash-and-stock bid, comes after JetBlue Airways repeatedly upped its own offer to buy Spirit outright in an all-cash deal.
The battle for Miramar, Florida-based Spirit has heated up in recent weeks. JetBlue has argued that its deal would help it better compete against large carriers and expand quickly at a time when new planes and pilots are in short supply.
JetBlue would take over Spirit, while a Frontier-Spirit combination would create a discount carrier behemoth. Either transaction would create the country's fifth-largest airline.
Spirit shareholders are set to vote on the Frontier deal on Thursday.
Spirit CEO Ted Christie told CNBC the airline's board has evaluated JetBlue's latest offer and still has doubts that regulators would approve the deal. The board, he said, still views a Frontier tie-up as "a superior transaction."
"We will more thoroughly review and assess the revised terms of the Frontier-Spirit merger agreement, and we intend to continue our 'vote no' campaign against the inferior Frontier transaction at the special meeting," JetBlue said in a statement Friday.
The new offer, which was announced late Friday, also increases a proposed reverse break-up fee by $100 million to $350 million, in the event the deal doesn't get approved by regulators. That matches the reverse break-up fee JetBlue has offered. Frontier's new offer includes a pre-payable amount of $2.22 to Spirit shareholders.
Christie said the board still had regulatory concerns about JetBlue's Northeast Alliance with American Airlines, which allows the carriers to coordinate on flights and book passengers on each other's planes. The Department of Justice last year sued to undo that partnership.
Shares of all three airlines were little changed in after-hours trading Friday.
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