US investment firm Castlelake has disclosed a £4.7 billion takeover proposal for easyJet after the airline turned down its third bid, intensifying the ongoing acquisition battle. The latest all-cash offer from Castlelake values easyJet at 625 pence per share, following previous rejected offers of 560p and 600p. Castlelake made this proposal public to allow easyJet shareholders to evaluate the bid before the June 26 deadline for the takeover.
Based in Minneapolis, Castlelake manages assets worth approximately $36 billion and expressed disappointment over easyJet’s board’s reluctance to seriously engage with its proposals. To comply with European ownership regulations that mandate EU airlines to be majority-owned by European investors, Castlelake has teamed up with aviation executives Peter Bellew and Mark Breen. Their plan involves an EU-controlled entity holding a majority stake in easyJet.
Despite this strategic maneuver, easyJet firmly rejected the proposal, calling it an opportunistic attempt to acquire the airline at a discounted rate. The airline contended that the offer came at a time when its share price is influenced by geopolitical uncertainties and does not accurately represent its long-term growth potential. EasyJet also raised concerns about the transparency of Castlelake’s proposed ownership structure and argued that the offer significantly undervalues the airline’s business and future prospects.
Nevertheless, investor interest spurred by the takeover speculation has positively impacted easyJet’s market performance. The airline’s shares have risen by approximately 40% over the past month and continued to trade higher following Castlelake’s announcement. EasyJet, headquartered in Luton, ranks as one of Europe’s largest budget airlines, positioned between Ryanair and Wizz Air in the low-cost carrier market.
As the June 26 deadline approaches, Castlelake faces a critical decision: whether to proceed with a formal takeover offer or abandon the acquisition attempt altogether.
