US investment firm Castlelake has disclosed its £4.7 billion proposal to acquire easyJet, marking an escalation in the takeover efforts after the budget airline dismissed the firm’s third bid. Valuing easyJet at 625 pence per share, Castlelake’s all-cash offer comes after earlier bids of 560p and 600p were rejected. The company, based in Minneapolis and managing around $36 billion in assets, opted to make its offer public, allowing easyJet shareholders to evaluate its offer ahead of the June 26 deadline.
Castlelake expressed its dissatisfaction with what it sees as easyJet’s board’s reluctance to engage seriously with its proposals. To navigate European regulations mandating that EU airlines remain majority-owned by European investors, Castlelake has joined forces with aviation experts Peter Bellew and Mark Breen. The proposed acquisition structure would involve an EU-controlled entity maintaining a majority stake in easyJet.
Despite these efforts, easyJet has firmly dismissed the proposal, calling it an opportunistic bid to acquire the airline at a reduced valuation. The company argued that the offer fails to reflect its long-term growth potential, as its share price remains impacted by current geopolitical uncertainties. EasyJet also raised concerns about the clarity of Castlelake’s proposed ownership model, asserting that the offer undervalues the airline’s business and future outlook.
Nonetheless, the speculation surrounding the takeover has had a positive effect on easyJet’s market performance. Over the past month, the airline’s shares have risen by approximately 40%, buoyed by investor interest, and continued to trade higher following Castlelake’s announcement. EasyJet, headquartered in Luton, stands as one of Europe’s leading budget airlines, positioned between Ryanair and Wizz Air in the low-cost carrier sector.
With the deadline approaching, Castlelake faces a decision on whether to advance with a formal takeover offer by June 26 or abandon the deal altogether.