The US investment firm Castlelake has unveiled its £4.7 billion offer to take over easyJet, following the airline’s rejection of its third proposal. This latest all-cash bid values easyJet at 625 pence per share, having previously dismissed offers of 560p and 600p. Castlelake, which manages around $36 billion in assets, opted to go public with its proposal to allow easyJet’s shareholders to evaluate it ahead of the June 26 deadline for a takeover decision.
Based in Minneapolis, Castlelake expressed dissatisfaction with what it perceives as easyJet’s board’s reluctance to engage seriously with its proposals. To navigate European regulations mandating that EU airlines be predominantly owned by European investors, the firm has teamed up with aviation industry figures Peter Bellew and Mark Breen. Their plan involves establishing an EU-controlled entity to hold the majority stake in easyJet.
Nonetheless, easyJet has firmly rejected the proposal, labeling it as an opportunistic attempt to buy the airline at a lower value. The airline contends that the offer was made during a period when its share price is hindered by geopolitical uncertainties, thus failing to represent its long-term growth potential. Additionally, easyJet has raised concerns about the transparency of Castlelake’s proposed ownership structure and argues that the offer undervalues the company’s future prospects.
Despite the rejection, the ongoing interest from investors has positively impacted easyJet’s market performance. Speculation surrounding the takeover has seen the airline’s shares climb by approximately 40% over the past month, and they continued to trade higher following Castlelake’s announcement. EasyJet, headquartered in Luton, is a major player in the European budget airline sector, positioned between Ryanair and Wizz Air in the low-cost carrier market.
With the June 26 deadline fast approaching, Castlelake faces a critical decision: whether to proceed with a formal takeover offer or abandon the pursuit altogether.