EasyJet Rejects £4.7 Billion Takeover Bid, Citing "Opportunistic" Offer
The budget airline dismissed a proposal from US firm Castlelake, calling it an attempt to acquire the company at a low valuation.
EasyJet has rejected a takeover offer valued at £4.74 billion from the US investment firm Castlelake, accusing the company of attempting to "buy the airline on the cheap." The budget carrier's stance came after Castlelake revealed it had made three unsuccessful takeover approaches to EasyJet this month.
Castlelake has now publicly disclosed its latest offer, enabling EasyJet shareholders to evaluate the proposal. Under UK takeover rules, Castlelake has until Friday to finalize its offer or withdraw. The US firm, which currently holds approximately 2.14% of EasyJet's shares through its managed funds, stated that its latest bid "offers compelling value" to the airline's shareholders.
EasyJet, a prominent European airline that transported over 90 million passengers last year across more than 1,200 routes in 38 countries, described Castlelake's offer as "highly opportunistic." The airline contends that its share price has been temporarily depressed, partly due to the impact of the Iran conflict on the travel sector. Castlelake's most recent proposal would provide EasyJet shareholders with 625 pence per share, representing a 24% premium over the closing price last Friday.
"Following the rejection of three proposals by the EasyJet Board, and given its unwillingness to engage meaningfully, Castlelake is announcing this Third Proposal to enable EasyJet shareholders to consider its merits," Castlelake said in a statement. The firm added that its ambition is "to support EasyJet as a stronger, more resilient European airline under European control, respecting EasyJet's valuable airline assets and continuing to sustain its network."
European Union regulations require that EasyJet be majority-owned by EU citizens. Castlelake has proposed an ownership structure designed to comply with these regulations, involving a partnership with two EU nationals, businessmen Peter Bellew and Mark Breen. This structure would establish an EU-based company that would hold majority control of the airline. Peter Bellew is a former chief operating officer for EasyJet and Ryanair, while Mark Breen leads an aerospace consultancy and has held senior roles at several airlines.
However, EasyJet has raised concerns about this proposed ownership structure, calling it "opaque" and stating that it does not provide a basis for assessing the feasibility of the takeover plan.