EasyJet Plc has rebuffed a £4.74 billion ($6.3 billion) takeover proposal from US investment firm Castlelake, which offered 625 pence per share. This rejection marks the third time EasyJet has turned down a bid from Castlelake, with previous offers at $5.60 and $6.00 per share also dismissed. EasyJet's board views the latest offer as "highly opportunistic" and an attempt to buy the airline "on the cheap," attributing its currently depressed share price partly to the impact of the Iran war on the travel sector. The 625 pence per share offer represents a 24% premium to EasyJet's closing price the previous Friday.
Castlelake, which already holds about a 2.14% stake in EasyJet through funds it manages, has now taken its proposal directly to shareholders. The investment firm contends that its latest bid offers "compelling value" to shareholders. However, EasyJet's stock is still trading almost a pound below Castlelake's offer, suggesting some investor skepticism about the bid materializing at the proposed level.
A key point of contention is the proposed ownership structure designed to comply with EU regulations requiring majority EU ownership for airlines. Castlelake suggested a partnership with two EU nationals, Peter Bellew and Mark Breen, who would own an EU-based company holding majority control of EasyJet. EasyJet, however, described this structure as "opaque" and lacking a basis to assess its deliverability, expressing "considerable reservations" about its elevated leverage and overall conditionality. Castlelake has until Friday to make a firm offer or withdraw.
EasyJet, a major European airline that carried over 90 million passengers last year across 38 countries and more than 1,200 routes, maintains that it is in a strong financial position, supported by a robust balance sheet and positive financial performance in recent years. The airline's board believes it can deliver long-term value for shareholders independently and views Castlelake's premium analysis as being based primarily on external conflict-affected share prices and short-term earnings, failing to reflect EasyJet's strong prospects and balance sheet.
