Merger

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Merger

Merger

On February 5, 2022, Spirit Airlines entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Frontier Group Holdings, Inc., a Delaware corporation (“Frontier”), and Top Gun Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary of Frontier (“Merger Sub”), pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into Spirit Airlines, with Spirit Airlines continuing as the surviving entity (the “Merger”). As a result of the Merger, each existing share of Spirit Airlines’ common stock will be converted into the right to receive (i) $2.13 in cash, without interest and (ii) 1.9126 shares of Frontier’s common stock (“Frontier Common Stock”), par value $0.001 per share. Upon consummation of the Merger, existing shareholders of Spirit Airlines will own approximately 48.5% of the outstanding shares of Frontier on a fully diluted basis.

Completion of the Merger is subject to the satisfaction or waiver of certain closing conditions, including, among other things, (1) approval of the Merger Agreement by Spirit Airlines’ stockholders, (2) receipt of applicable regulatory approvals, including approvals from the U.S. Federal Communications Commission (“FCC”), U.S. Federal Aviation Administration (“FAA”) and the U.S. Department of Transportation (“DOT”) and the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other required regulatory approvals; (3) the absence of any law or order prohibiting the consummation of the transactions; (4) the effectiveness of the registration statement to be filed by Frontier and Spirit Airlines with the SEC pursuant to the Merger Agreement; (5) the authorization and approval for listing on NASDAQ of the shares of Frontier Common Stock to be issued to holders of Spirit Airlines’ common stock in the Merger; and (6) the absence of any material adverse effect (as defined in the Merger Agreement) on either Spirit Airlines or Frontier.

The Merger Agreement contains certain customary termination rights for Spirit Airlines and Frontier, including, without limitation, a right for either party to terminate if the Merger is not consummated on or before February 5, 2023, subject to certain extensions if needed to obtain regulatory approvals. Upon the termination of the Merger Agreement under specified circumstances, Spirit Airlines will be required to pay Frontier a breakup fee of $94.2 million. The Merger Agreement also provides the methodology by which certain expenses will be borne.

On April 5, 2022, the Company announced that it received an unsolicited proposal from JetBlue Airways (JetBlue) to acquire all of the outstanding shares of Spirit Airlines’ common stock in an all-cash transaction for $33.00 per share. After consulting with financial and legal advisors, the Company's Board of Directors determined that JetBlue’s proposal could

reasonably be likely to lead to a "Superior Proposal" as defined in the merger agreement with Frontier and evaluated the proposal in accordance with the terms of the merger agreement.

On May 2, 2022, the Company announced that its Board of Directors, in consultation with outside financial and legal advisors, unanimously determined that the unsolicited proposal received from JetBlue does not constitute a "Superior Proposal" due to an unacceptable level of deal completion risk. The Company will continue to advance toward completing the transaction with Frontier, which is expected to close in the second half of 2022. The transaction is subject to customary closing conditions, including completion of the ongoing regulatory review process and approval of the Company's stockholders.