US investment firm Castlelake has disclosed a £4.7 billion takeover bid for easyJet, following the airline’s rejection of its third offer. The latest all-cash proposal values easyJet at 625 pence per share, after earlier bids of 560p and 600p were turned down. Castlelake, managing around $36 billion in assets, made the proposal public to allow shareholders to evaluate it before the June 26 deadline for the takeover. The firm expressed dissatisfaction with easyJet’s board for not engaging seriously with its offers.
To comply with European regulations requiring EU airlines to maintain majority ownership by European investors, Castlelake has teamed up with aviation professionals Peter Bellew and Mark Breen. The plan involves an EU-controlled entity holding a majority stake in the airline. However, easyJet has firmly rejected the proposal, labeling it as an opportunistic move to purchase the company at an undervalued price. The airline contends that the offer came at a time when its share price is impacted by geopolitical uncertainties and doesn’t accurately reflect its long-term potential.
EasyJet also raised concerns about the transparency of Castlelake’s proposed ownership structure, arguing that the offer significantly undervalues the airline’s business and future prospects. Despite the airline’s resistance, speculation about the takeover has positively affected its market performance, with shares rising approximately 40% over the past month. The stock continued to trade higher following Castlelake’s announcement.
Castlelake now faces the decision of whether to submit a formal takeover offer by June 26 or withdraw from the potential deal. EasyJet, based in Luton, is a major player in the European budget airline sector, ranking behind Ryanair and ahead of Wizz Air among low-cost carriers. The unfolding takeover battle highlights the strategic maneuvers in the airline industry as companies navigate financial pressures and market opportunities.