US-based investment firm Castlelake has unveiled its £4.7 billion takeover proposal for easyJet, following the airline’s rejection of its third offer. The latest bid, an all-cash proposition, values easyJet at 625 pence per share, surpassing the earlier declined offers of 560p and 600p. By making the proposal public, Castlelake aims to allow shareholders to evaluate its potential before the June 26 deadline for the takeover bid.
Castlelake, which manages assets worth approximately $36 billion, expressed dissatisfaction with what it perceives as a lack of meaningful engagement from easyJet’s board. To comply with European regulations requiring EU airlines to be majority-owned by European investors, Castlelake has teamed up with aviation executives Peter Bellew and Mark Breen. Their plan involves creating an EU-controlled entity to hold a majority stake in easyJet.
Despite this strategic approach, easyJet has firmly dismissed Castlelake’s proposal, labeling it as an opportunistic move to acquire the airline at a reduced valuation. The airline argues the offer was made during a time when its share price is impacted by geopolitical uncertainty, and thus, does not accurately reflect its long-term growth potential. Furthermore, easyJet has raised concerns about the transparency of Castlelake’s ownership structure, stating that the proposal undervalues the airline’s business and future prospects.
Nonetheless, the takeover interest has positively influenced easyJet’s market performance, with its shares rising approximately 40% over the past month amid speculation. Following Castlelake’s announcement, the shares continued to trade higher. EasyJet, based in Luton, ranks among Europe’s major budget airlines, positioned between Ryanair and Wizz Air in the low-cost carrier sector.
As the June 26 deadline approaches, Castlelake must decide whether to proceed with a formal takeover offer or abandon its pursuit of easyJet. The unfolding situation continues to capture the attention of investors and market analysts alike, as they await the next developments in this high-stakes takeover battle.