Castlelake's final all-cash bid of £5.2 billion ($6.9 billion) or 685 pence per share for EasyJet has been accepted by the airline's board. This represents a 22% premium over EasyJet's closing share price of 558 pence on July 3, the day before the extended deadline. The deal marks the end of a protracted negotiation period where EasyJet had previously rejected three non-binding offers, then a fourth improved offer of 650 pence per share, stating they undervalued the airline. This final agreement comes just hours before Castlelake's extended deadline of 5 p.m. London time on July 5 to make a firm offer or withdraw.
Despite the acceptance, some of EasyJet's largest shareholders had been publicly pushing for an even higher valuation, with several indicating that £7 a share, or approximately £5.3 billion, would be a more attractive price. Prominent investors like Sam Ziff of Oldfield, one of EasyJet’s 15 largest shareholders, and founder Sir Stelios Haji-Ioannou, whose family owns 15% of the carrier, believed the airline was undervalued, especially considering its slot portfolio and fleet. The airline's board, led by chair Sir Stephen Hester, had initially deemed Castlelake's approaches opportunistic, given that EasyJet's share price had been under pressure following the Iran conflict.
Castlelake's acquisition structure involves a vehicle where 49% would be owned by Castlelake and co-investors including Brookfield Asset Management, with 51% owned by EU nationals Peter Bellew and Mark Breen. This structure is intended to comply with EU airline regulations requiring majority EU ownership and control. The deal is expected to be finalized, though the market's reaction to the accepted price remains to be seen, as EasyJet's stock was trading almost a pound below Castlelake's previous 625 pence offer, indicating investor skepticism about a bid at that level. The market had valued the perceived risk in the deal at around £5.60 per share, not near the 650 pence bid.
