US investment firm Castlelake has disclosed its £4.7 billion bid to acquire easyJet after the airline refused its third offer, intensifying an ongoing takeover tussle. The latest all-cash proposal from Castlelake values easyJet at 625 pence per share, following previously rejected offers of 560p and 600p. The firm decided to go public with its proposal to allow shareholders the opportunity to evaluate it before the takeover deadline on June 26.
Based in Minneapolis and managing around $36 billion in assets, Castlelake has expressed displeasure with easyJet’s board, accusing them of a lack of meaningful engagement with its bids. In an effort to comply with European ownership laws that mandate EU airlines be majority-owned by European investors, Castlelake has teamed up with aviation figures Peter Bellew and Mark Breen. The plan involves creating an EU-controlled entity to hold a majority stake in the airline.
Despite these efforts, easyJet has firmly rejected Castlelake’s proposal, calling it an opportunistic move to acquire the company at a lower valuation. The airline argues that the offer comes at a time when its share price is negatively impacted by geopolitical uncertainties and does not reflect its long-term growth potential. Additionally, easyJet has raised concerns about the transparency of Castlelake’s proposed ownership structure, maintaining that the offer undervalues the business and its future.
Investor interest, however, has buoyed easyJet’s market performance. Speculation surrounding the potential takeover has led to a roughly 40% increase in the airline’s share price over the past month, with shares trading higher following Castlelake’s announcement. EasyJet, headquartered in Luton, is a major player in Europe’s budget airline sector, positioned between Ryanair and Wizz Air in the low-cost carrier market.
As the June 26 deadline approaches, Castlelake is now faced with the decision of either making a formal takeover offer or stepping away from the deal. The outcome remains uncertain as both parties weigh their next moves in this corporate face-off.
