EasyJet Takeover Bid: US Firm’s £4.7bn Offer Rejected

EasyJet Rejects Castlelake’s Takeover Approach

EasyJet, one of Europe’s largest airlines, has rejected a £4.74 billion takeover offer from US investment firm Castlelake, calling it an attempt to buy the company ‘on the cheap’.

This comes after Castlelake revealed it had made three separate approaches to the airline this month, all of which were turned down.

Castlelake has now made its latest offer public, allowing shareholders to evaluate the proposal. The firm has until Friday to make a formal bid or walk away.

A Major Player in European Skies

EasyJet is a significant player in the European aviation market, carrying over 90 million passengers last year across 38 countries and more than 1,200 routes.

The airline has reiterated its stance that Castlelake’s offer is ‘highly opportunistic’, suggesting that its share price has been temporarily affected by factors like the Iran war’s impact on the travel industry.

Castlelake’s Proposal and EasyJet’s Response

Castlelake’s latest offer values EasyJet at 625p per share, a 24% premium over last Friday’s closing price.

The US firm, which already holds a 2.14% stake in EasyJet through its managed funds, believes its bid offers ‘compelling value’ to shareholders.

In a statement, Castlelake expressed frustration at the EasyJet Board’s rejection of their proposals, saying, ‘Given their unwillingness to engage meaningfully, we are announcing this Third Proposal to enable EasyJet shareholders to consider its merits.’

Castlelake’s vision is to support EasyJet as a stronger, more resilient European airline under European control, respecting its assets and network.

Regulatory Considerations and Ownership Structure

European Union regulations require EasyJet to be majority-owned by EU citizens. Castlelake has proposed an ownership structure to address this, partnering with EU nationals Peter Bellew and Mark Breen.

Peter Bellew, a former EasyJet chief operating officer, and Mark Breen, an aerospace consultant, would own an EU-based company with majority control of the airline.

EasyJet, however, has criticized the proposed structure as ‘opaque’ and lacking clarity on the takeover plan’s feasibility.

The Future of EasyJet

As the deadline for Castlelake’s decision approaches, the future of EasyJet remains uncertain. Will the airline find a new suitor, or will it chart its own course towards recovery and growth in the post-pandemic travel landscape?

Stay tuned for further developments in this high-stakes business story.