The battle between dueling suitors JetBlue Airways (JBLU  ) and Frontier Group (ULCC  ) over the acquisition of budget airliner Spirit (SAVE  ) is hitting a new peak after Frontier Group offered a breakup fee to its offer.

This latest update comes after JetBlue made clear its intention to launch a hostile takeover in mid-May.

Frontier offered Spirit a termination fee of $250 million if the Federal Trade Commission (FTC) or another federal regulator blocks a merger between the two companies. The offer is a rebuttal to JetBlue's breakup fee, which came attached to a deal that Spirit's Board of Directors would later shoot down. Undeterred by the earlier rejection and likely motivated by Friday's shareholder vote to decide on Frontier's offer, JetBlue increased its breakup fee from $150 million to $350 million on Monday.

Frontier's offer and JetBlue's rebuttal come after competing proxy notes issued by advisory firms Institutional Shareholder Services (ISS) and Glass Lewis. ISS's proxy note urged shareholders to shoot down Frontier's offer, advising them that "The offer from JetBlue is superior from a financial standpoint, with a cash consideration at a meaningfully higher premium than the mostly stock deal from Frontier." Glass Lewis' note meanwhile advised investors to forge ahead with Frontier, echoing the concerns of Spirit's Board of Directors that there are "valid questions regarding JetBlue's motivations for making the JetBlue Offer, given that Spirit has been a vocal critic of the NEA between JetBlue and American Airlines, and Spirit could be a witness for the DOJ on the matter."

JetBlue's aggression in pursuing a merger with Spirit has been noteworthy for the apparent lengths the airline is willing to go to, appearing almost desperate in its attempts. From a business perspective, one can see why; regardless of who buys Spirit, the resulting airline would be the fifth-largest in the United States. However, from the beginning, there has been curiosity surrounding JetBlue's enthusiasm for the low-cost airline.

The initial offer to acquire Spirit took Wall Street by surprise, given that Spirit and Frontier's business models align completely. In contrast, JetBlue's business model, which includes many amenities in its higher-priced tickets, contrasts heavily with the "bare minimum" covered by Spirit's low pricing.

While there is certainly plenty to be gained by a merger by either side, regardless of the synergy between business models, it certainly seems that there is quite a bit that shareholders still have to consider. While JetBlue and American Airlines (AAL  ) are under investigation by the Department of Justice, the former airline's criticism of a Frontier-Spirit deal potentially facing similar antitrust pressures isn't unfounded. The Biden administration has been relatively active in pursuing antitrust cases, and given the similarity between Spirit and Frontier's businesses, it isn't a foregone conclusion that regulators could see a concentration of budget airlines as unacceptable.