In a bold move, US-based investment firm Castlelake has publicly announced its £4.7 billion takeover bid for easyJet, after the airline turned down its third proposal. The latest offer from Castlelake, set at 625 pence per share, follows previously rejected bids of 560p and 600p, and is part of an escalating takeover battle. By making its proposal public, Castlelake aims to allow easyJet shareholders to evaluate the offer’s benefits ahead of the June 26 deadline for the takeover.
Castlelake, headquartered in Minneapolis and managing around $36 billion in assets, has expressed dissatisfaction with what it perceives as easyJet’s board’s reluctance to seriously consider its proposals. To comply with European regulations mandating that EU airlines maintain majority European ownership, Castlelake has teamed up with aviation executives Peter Bellew and Mark Breen. They have proposed a structure where an EU-controlled entity would hold a majority stake in easyJet.
Despite these efforts, easyJet has firmly rejected Castlelake’s proposal, labeling it as an opportunistic attempt to acquire the airline at a low valuation. The company argues that the offer was made during a time when its share price is still influenced by geopolitical uncertainties and does not reflect easyJet’s potential for long-term growth. EasyJet also raised concerns about the clarity of Castlelake’s proposed ownership structure and insisted that the offer significantly undervalues the airline and its future prospects.
Amidst the takeover speculation, investor interest has positively impacted easyJet’s market performance, with the airline’s shares rising by about 40% in the past month. Following Castlelake’s announcement, easyJet’s shares continued to trade higher. The airline, based in Luton, ranks as one of Europe’s major budget carriers, positioned between Ryanair and Wizz Air in the low-cost airline market.
As the June 26 deadline approaches, Castlelake faces a critical decision: either to present a formal takeover offer or to withdraw from the deal. The unfolding developments in this takeover saga will be closely watched by investors and industry analysts alike.