EasyJet's board of directors has agreed to a £5.5 billion ($7.01 billion) takeover offer from Castlelake, the US private equity firm. The revised proposal, valuing the airline at £7 per share, signals that EasyJet’s largest investors have succeeded in their push for a higher valuation. This agreement comes after EasyJet previously rejected Castlelake’s fourth bid of £6.50 per share, which undervalued the airline, according to its board and shareholders.
The deal is contingent on Castlelake securing financing and is expected to be finalized by the end of the year. Key shareholders, including EasyJet founder Sir Stelios Haji-Ioannou, whose family holds a 15% stake, have engaged with both parties, and the proposed structure allows existing investors to retain stakes if the airline goes private. This flexibility and the increased offer price align with the long-term ownership orientation of many UK retail and institutional investors.
The board's decision follows an extended deadline for Castlelake to make an improved offer, which expired on July 5th. Shareholders' expectations for a higher price were largely based on EasyJet's projected profitability recovery, driven by new fuel-efficient aircraft and growth in its holidays business. Despite concerns over potential risks like rising fuel prices and regional tensions, the £7 per share offer is seen as reflecting the airline's underlying asset value, including its slot portfolio and fleet, which were previously deemed undervalued by prior bids.
