By David Shepardson and Aishwarya Nair
WASHINGTON (Reuters) -Takeover target Spirit Airlines (NYSE:SAVE) Inc on Tuesday said it was in talks with JetBlue Airways (NASDAQ:JBLU) Corp over a $3.4 billion sweetened offer and expects to decide on the proposal this month.
The ultra-low-cost airline granted JetBlue access to the same due diligence information being shared with Frontier Group Holdings Inc after failing to secure enough shareholder support for its deal with the rival suitor.
Spirit CEO Ted Christie said the board plans to "bring this process to a conclusion" and update shareholders ahead of the June 30 shareholder meeting.
"We're pleased that there now seems to be a genuine desire from the Spirit board to engage with us," JetBlue Chief Executive Robin Hayes told Reuters on Friday, adding that he was "optimistic" that a deal could be reached. "We're going to continue to engage with the Spirit board over the next few weeks."
Either of the deals would create the fifth-largest U.S. airline, helping the buyer compete with larger legacy players at a time when the industry faces labor and aircraft shortages but both will face intense regulatory scrutiny.
Spirit rebuffed a buyout proposal from JetBlue last month but later agreed to engage with it after the larger peer increased the reverse break-up fee by $150 million to $350 million, payable to Spirit shareholders, in case the deal falls through due to antitrust reasons.
Spirit, however, continues to be in talks with Frontier under the terms of its existing merger agreement.
Spirit also said it was providing information requested by the U.S. Justice Department and the Federal Trade Commission for both the deals as part of an ongoing antitrust review process.
Hayes told Reuters "the regulatory process is under way" and that the airline had provided documents to the Justice Department. "That process takes several months and... the conversations then would happen when you're well into that process," Hayes said.
Frontier shares were down 1.95% to $9.03, while Spirit shares were up nearly 1% at $21.41. The current value of Frontier's stock and cash offer is $19.49, trailing JetBlue's cash offer of $31.50 per share.