US Investment Firm Castlelake Nears $6.9 Billion Deal to Acquire EasyJet
After multiple rejections, the private equity firm has reached an agreement in principle with the budget airline.
EasyJet shares surged over 10 percent in early trading on Monday following news that U.S. investment firm Castlelake is nearing a takeover deal valued at approximately £5.2 billion ($6.90 per share).
The budget airline announced it has reached an "agreement in principle" with Castlelake, a private equity firm that has pursued EasyJet for weeks. This latest offer comes after four previous bids were rejected by the airline's leadership, who had previously characterized Castlelake's proposals as "highly opportunistic" and an attempt to acquire the company "on the cheap."
Castlelake's new offer represents a significant increase from its earlier proposals, which ranged from £5.60 to £6.50 per share. While the airline's board has indicated it is "minded to recommend" the latest offer, they cautioned that "there can be no certainty that any firm offer will be made." Castlelake has until August 3 to submit a formal bid.
The potential acquisition raises concerns about job security and airfares within the aviation industry, which is currently grappling with elevated jet fuel prices and reduced demand following recent geopolitical events. The deal also presents a significant test for political leaders amid a broader trend of overseas entities acquiring British companies.
EasyJet, founded by Sir Stelios Haji-Ioannou in 1995, is seen by Castlelake as an attractive target due to its modern Airbus fleet and strategic landing slots at major airports like London Gatwick and London Luton, as well as in Milan and Geneva. The involvement of EasyJet founder Sir Stelios and his family, who retain a 15.3 percent stake, will be crucial. While they have not yet commented publicly, sources indicated last month that an "eyewatering" bid would likely be required to persuade them to sell.
This proposed takeover of EasyJet follows a series of high-profile acquisitions of British firms by foreign buyers, including Tate & Lyle, Beazley, Schroders, and the owner of William Hill. The ongoing wave of such deals has sparked debate about the future of the London stock market and the strategic sale of the UK's established companies.