EasyJet has rejected a $6.3 billion (£4.74 billion) takeover offer from U.S. investment firm Castlelake, citing that the bid undervalued the airline. This rejection comes after Castlelake made its offer public, following three prior rejections from EasyJet's board. Castlelake stated that EasyJet's "unwillingness to engage meaningfully" was the reason for publicly disclosing the bid, which included a partial equity alternative for investors.
According to reports, EasyJet and its investors are now holding out for at least an additional £600 million ($794.46 million) from Castlelake. A large unnamed investor suggested that EasyJet would engage if the price reached at least £7 per share, which would value the airline at approximately £5.3 billion. Castlelake's third and highest non-binding proposal was 625p per share, a 24% premium to EasyJet's closing price the previous Friday.
EasyJet described Castlelake's offer as "highly opportunistic," arguing that its share price was "temporarily depressed" partly due to the impact of the Iran war on the travel sector. Castlelake's 625p offer represents a 59% premium to EasyJet's undisturbed price on May 28, and a 71% premium to the volume-weighted average price since the carrier's April interim update. Castlelake, which already holds about a 2.14% stake in EasyJet, has until Friday, June 26, to make a firm offer or withdraw.
To address European Union regulations requiring EasyJet to be majority-owned by EU citizens, Castlelake proposed an ownership structure involving a partnership with two EU nationals, Peter Bellew and Mark Breen, who would own an EU-based company with majority control. However, EasyJet criticized this proposed structure as "opaque" and lacking a clear basis for assessing the takeover plan's deliverability.
