Frontier Group Holdings Inc. sweetened the terms of its takeover offer for Spirit Airlines Inc. and won support from a key proxy advisory firm, giving the ultra-discount carrier new momentum as it tries to fend off a rival bid by JetBlue Airways Corp.

Frontier agreed to pay $250 million, or $2.23 a share, to Spirit if the deal collapses because of objections from US regulators, the airlines said in a joint statement late Thursday. Spirit had earlier rejected JetBlue’s offer, which includes a similar $200 million fee, over concerns that regulatory hurdles would prevent it from being completed.

The revised terms, which have been approved by the boards of both Frontier and Spirit, could help sway some shareholders ahead of a June 10 vote on the stock-and-cash deal initially valued at $2.9 billion. It would combine carriers that offer bare-bones fares and charge for anything extra.

The agreement is “the best available and most actionable” alternative for Spirit shareholders, proxy analysis firm Glass Lewis & Co. said in a report.

“There are likely few, if any, other logical potential acquirers that represent a better fit for the company than Frontier in terms of scale, operations, business model, geographic fit and regulatory certainty,” Glass Lewis said. While JetBlue’s offer is higher in value, it hasn’t sufficiently addressed Spirit’s concerns that the bid couldn’t win approval from federal antitrust enforcers, it said.

JetBlue didn’t immediately comment on the Glass Lewis report.

Frontier shares fell 2.7% at 10:18 a.m. in New York as the broader market slumped, while Spirit declined 2.9% and JetBlue slipped 2.1%.

The latest developments come several days after another proxy adviser, Institutional Shareholder Services Inc., recommended Spirit shareholders reject the Frontier takeover agreement as a signal to the board to engage more with JetBlue over its competing bid. It also noted the lack of a reverse termination payment at that time.

While both deals face regulatory risks, JetBlue’s all-cash offer was superior from a financial standpoint, ISS said. Spirit rejected JetBlue’s $3.6 billion original offer, prompting a subsequent hostile $3.3 billion tender bid.

Fifth Largest

A combination of Frontier and Spirit would become the fifth-largest US airline in terms of domestic passenger traffic, jumping ahead of Alaska Air Group Inc. and JetBlue. It would be the “premier national ultra-low-cost challenger” to the four largest US carriers, Glass Lewis said.

Frontier agreed to add the reverse breakup fee after talks with Spirit shareholders “who have expressed support for the strategic rationale of our combination but a desire for additional stockholder protections,” Spirit Chief Executive Officer Ted Christie said in a statement Thursday.

JetBlue said in a statement following the fee announcement that Spirit sought the change “when it became increasingly clear their shareholders would decisively reject the Spirit board’s flawed process and Frontier’s inferior transaction.” The airline will review the revised terms once the amended agreement is made available, it said.

Separate from the reverse termination payment, Frontier’s agreement with Spirit also includes a $94.2 million breakup fee payable to Frontier if the deal wasn’t completed.