US investment firm Castlelake has unveiled a £4.7 billion proposal to acquire easyJet, after the airline rebuffed its third offer, intensifying a takeover contest. The latest all-cash bid from Castlelake values easyJet at 625 pence per share, following previous unsuccessful offers of 560p and 600p. The firm, based in Minneapolis and managing around $36 billion in assets, decided to publicize the proposal to allow shareholders to evaluate its benefits before the deadline on June 26.
Castlelake expressed disappointment over what it perceives as the easyJet board’s reluctance to seriously consider its offers. To comply with European regulations mandating that EU airlines must be majority-owned by European investors, Castlelake has teamed up with aviation figures Peter Bellew and Mark Breen. The proposed plan includes an EU-controlled entity holding a majority stake in the airline.
Despite these efforts, easyJet has firmly rejected the proposal, labeling it as an opportunistic move to acquire the company at a reduced valuation. The airline contends that the offer comes at a time when its share price is influenced by geopolitical uncertainties, and it does not accurately represent its long-term growth potential. Furthermore, easyJet raised concerns about the transparency of Castlelake’s proposed ownership structure, asserting that the offer undervalues the company’s business and future prospects.
Yet, the ongoing investor interest has positively impacted easyJet’s market performance. The airline’s shares have risen by approximately 40% over the past month amid takeover speculation and experienced a further uptick following Castlelake’s announcement. EasyJet, headquartered in Luton, is among Europe’s leading budget airlines, positioned between Ryanair and Wizz Air in the low-cost carrier sector.
As the June 26 deadline approaches, Castlelake faces a critical decision: whether to proceed with a formal takeover bid or withdraw from the pursuit. The unfolding situation continues to capture the attention of the investment community and industry watchers, as the outcome could significantly reshape the competitive landscape of Europe’s budget airline market.