US investment firm Castlelake has unveiled its £4.7 billion proposal to acquire easyJet, following the airline’s rejection of its third offer, intensifying a takeover battle. Castlelake’s current proposal, an all-cash offer valuing easyJet at 625 pence per share, comes after previous bids of 560p and 600p were turned down. The firm decided to make the offer public to allow shareholders to evaluate the proposal before the June 26 deadline.
Castlelake, a Minneapolis-based company managing around $36 billion in assets, expressed dissatisfaction with what it sees as a lack of meaningful engagement from the easyJet board regarding its proposals. To comply with European ownership laws, which mandate that EU airlines be majority-owned by European investors, Castlelake has collaborated with aviation executives Peter Bellew and Mark Breen. Under this plan, an EU-controlled entity would hold a majority stake in the airline.
Despite these efforts, easyJet has firmly rejected the offer, labeling it as an opportunistic move to acquire the company at a reduced valuation. The airline contends that the bid came at a time when its share price is adversely affected by geopolitical uncertainties and does not accurately reflect its long-term growth potential. Additionally, easyJet raised concerns about the transparency of Castlelake’s proposed ownership structure, arguing that the bid fundamentally undervalues the company’s business and future prospects.
Nevertheless, the takeover interest has positively influenced easyJet’s market standing. The airline’s shares have surged by approximately 40% over the past month amid speculation of a takeover, continuing to trade higher following Castlelake’s announcement. EasyJet, based in Luton, ranks among Europe’s largest budget airlines, positioned behind Ryanair and ahead of Wizz Air in the low-cost carrier sector.
Facing a crucial decision, Castlelake has until June 26 to determine whether to formally proceed with its takeover offer or withdraw from the deal. The ongoing developments have placed easyJet at the center of attention as the battle for its control unfolds.