Frontier Airlines will pay Spirit Airlines Inc. a $250 million breakup fee if regulators block a merger between the two carriers, under a new agreement by the companies Thursday.
It also addresses a concern raised this week by Institutional Shareholder Services Inc., a proxy advisory firm that cited the lack of such a breakup fee as a key reason for its recommendation that Spirit investors vote against the Frontier deal.
JetBlue, which swooped in with a surprise offer for Spirit in April, after its deal with Frontier had been announced, has promised to pay $200 million if regulators were to block a JetBlue-Spirit deal.
Spirit executives said Thursday that they believe the additional fee should make the decision easier for shareholders, who are scheduled to vote on the Frontier merger next week.
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