US Firm Castlelake Nears £5.2 Billion Deal for EasyJet
The budget airline has reached an 'agreement in principle' with the American investment firm, which has seen multiple previous bids rejected.
EasyJet is poised to be acquired by U.S. investment firm Castlelake in a deal valued at over £5 billion, potentially marking the sale of another prominent British company to foreign ownership. The budget airline announced it has reached an "agreement in principle" with Castlelake, a move that comes amid concerns over job security and airfares within the aviation industry, which has been affected by rising jet fuel prices and reduced demand following international conflicts.
Castlelake has pursued EasyJet for several weeks, with four previous offers being rejected. The airline's management had initially characterized these proposals as "highly opportunistic" and an attempt to acquire the company "on the cheap." However, the tone shifted following Castlelake's fifth bid, which values the company at £6.90 per share, or approximately £5.2 billion. EasyJet's board has indicated it is "minded to recommend" this latest offer.
Castlelake is expected to formally table a firm offer by August 3. While the companies cautioned in a joint statement that "there can be no certainty that any firm offer will be made," the current agreement suggests a deal is likely.
EasyJet has previously turned down offers ranging from £5.60 to £6.50 per share. The airline's openness to the most recent bid followed Castlelake being granted access to its financial records.
Castlelake's interest is reportedly driven by EasyJet's modern fleet of Airbus aircraft and its strategic landing slots at major airports, including London Gatwick, London Luton, Milan, and Geneva. The potential acquisition also requires the approval of EasyJet founder Sir Stelios Haji-Ioannou and his family, who retain a 15.3% stake in the company. Sources have indicated that a substantial offer would be necessary to persuade the family to sell.