EasyJet Faces Boardroom Divide Over Multi-Billion Pound Takeover Bid
US investment firm Castlelake has lodged a fourth offer, valued at £4.9bn, which chairman Stephen Hester reportedly favors, though some board members remain skeptical.
EasyJet is experiencing internal boardroom tensions as U.S. investment firm Castlelake pursues a potential multi-billion pound takeover of the budget airline. Castlelake's latest offer, valued at £4.9 billion or 650p per share, was rejected by the airline's board this week for substantially undervaluing the company. However, EasyJet has granted Castlelake access to limited commercial information and extended the deadline for a firm offer to July 5, suggesting a potential path forward.
Sources indicate that EasyJet Chairman Stephen Hester is more amenable to a deal with Castlelake than some other board members, who are reportedly skeptical of the current offer. There are suggestions that some on the board believe the airline is worth closer to £10 per share. The airline's founder, Stelios Haji-Ioannou, who retains a 15% stake, is also reportedly holding out for a significantly higher bid.
Castlelake's proposal involves a new acquisition group where the U.S. firm would hold a 49% stake, with the remaining 51% held by EU citizens. This structure is intended to comply with European Union regulations requiring airlines with major operations in the bloc to be majority-owned by EU citizens.
This situation unfolds as the London stock market becomes a frequent target for foreign bidders. In recent weeks, other UK firms such as warehouse giant Segro, City institution Schroders, Lloyd's of London insurer Beazley, and laboratory testing group Intertek have faced or accepted foreign takeover bids. Energy firm DCC is also expected to follow suit.
This is not the first time Hester has been involved in a UK company facing a foreign takeover. In 2020, as CEO of RSA, he oversaw the insurer's £7.2 billion sale and subsequent breakup, with parts sold to Canada's Intact and Denmark's Tryg. Hester also previously led the Royal Bank of Scotland through its recovery after a substantial government bailout.
EasyJet declined to comment on the matter. A source close to the company stated that "there is no split on the board."