EasyJet has reached an outline agreement for a £5 billion ($6.3 billion) takeover by Minneapolis-based investment firm Castlelake. This development follows weeks of negotiations and a prior rejection by EasyJet of Castlelake's £4.9 billion ($6.2 billion) offer. The airline's board had previously viewed Castlelake's earlier proposals as significantly undervaluing the company and its prospects.
The agreement gives Castlelake a 49% stake in the budget carrier. The remaining ownership will be held by Canadian investment giant Brookfield Asset Management and European nationals Peter Bellew, EasyJet's former operations chief, and Mark Breen, an Irish airline executive. This ownership structure aims to address European Union regulations that require EU airlines to remain majority-owned and controlled by EU investors, a concern EasyJet previously raised regarding the deliverability of Castlelake's offers.
EasyJet's share price had been under pressure, down almost 75% from its peak 11 years ago, and delivered the worst stock market performance among Europe's major airlines in the past year. This weakened valuation made it an attractive target for suitors like Castlelake, which has $36 billion (£27.3 billion) in assets under management and prior experience with airlines, including talks with bankrupt Spirit Airlines. EasyJet founder Sir Stelios Haji-Ioannou, the airline's biggest shareholder with a 15% family stake, has not yet commented on the latest agreement, but Castlelake has indicated a willingness to allow existing investors to retain stakes if the airline goes private.
