US investment firm Castlelake has unveiled its £4.7 billion bid to acquire easyJet, intensifying a takeover battle after the British airline turned down its third offer. The latest proposal, which is an all-cash offer valuing easyJet at 625 pence per share, follows previous bids of 560p and 600p that were also rejected. Castlelake decided to make its offer public to allow shareholders to evaluate the proposal before the takeover deadline on June 26.
Based in Minneapolis, Castlelake manages around $36 billion in assets and has expressed dissatisfaction with what it perceives as a lack of meaningful engagement from easyJet’s board on its proposals. To comply with European ownership regulations mandating that EU airlines be predominantly owned by European investors, Castlelake has teamed up with aviation executives Peter Bellew and Mark Breen. As part of their strategy, an EU-controlled entity would hold the majority stake in easyJet.
Despite these efforts, easyJet has firmly dismissed the proposal, labeling it as an opportunistic move to purchase the airline at a reduced valuation. The airline contends that the offer comes at a time when its share price is still impacted by geopolitical uncertainties and does not accurately reflect its potential for long-term growth. Additionally, easyJet has raised concerns about the transparency of Castlelake’s proposed ownership structure, arguing that the offer undervalues the company and its future prospects.
In the midst of this takeover speculation, easyJet’s market performance has seen an upswing, with its shares rising approximately 40% over the past month. Following Castlelake’s announcement, the airline’s shares continued to trade higher. EasyJet, headquartered in Luton, is a major player in the European budget airline sector, positioned between Ryanair and Wizz Air in the low-cost carrier market.
As the June 26 deadline approaches, Castlelake faces the decision of whether to proceed with a formal takeover offer or step away from the deal. The unfolding scenario keeps both the investment community and the airline industry closely watching for the next move in this high-stakes acquisition attempt.