UPDATE 1-ISS says JetBlue's Spirit offer 'more favorable' but sticks to Frontier

(Adds details on Spirit Airlines rejecting JetBlue's sweetened offer)

June 28 (Reuters) - Institutional Shareholder Services (ISS) said JetBlue Airways Corp's latest offer to buy Spirit Airlines Inc is "more favorable" for the ultra-low-cost airline's shareholders, but maintained its support for the Frontier deal.

Spirit Airlines on Tuesday again cited antitrust concerns to reject JetBlue's sweetened offer and asked its shareholders to vote for a merger with Frontier at Thursday's meeting.

The influential proxy advisory firm in a report dated Monday said, with the shareholder meet to approve the deal set as early as Thursday, it was hesitant to change its earlier stand recommending them to vote for Frontier's offer.

"The addition of the ticking fee in the JetBlue offer – a provision without a counterpart in the Frontier offer – provides a further level of regulatory risk mitigation," ISS said.

JetBlue's ticking fee would give Spirit shareholders a monthly prepayment of 10 cents per share between January 2023 and the closing of the deal.

ISS in a report published on Friday had urged shareholders of Spirit Airlines to vote for a proposed merger with Frontier Group, after it boosted its offer for the airline.

Both JetBlue and Bill Franke-backed Frontier are locked in an intense bidding war for Spirit as they seek to create the fifth-largest airline in the United States that can take on the legacy players. (Reporting by Nathan Gomes in Bengaluru; Editing by Shinjini Ganguli)