EasyJet has agreed in principle to a takeover bid from US investment firm Castlelake, with the offer valuing the carrier at up to £5.5 billion ($7.34 billion) on a fully diluted basis. The new proposal is for £6.90 per share, marking a 73% premium to EasyJet's closing price on May 29, before Castlelake's interest was publicly known. EasyJet's board has indicated it would be "minded to recommend" this offer to shareholders, a significant shift after previously rejecting four lower bids, including a £4.93 billion offer.
Castlelake has until August 3 to formally announce its intention to make an offer. A key hurdle for the deal is the European Union's regulations which require airlines operating in the bloc to be majority-owned and controlled by EU nationals. Castlelake, a US firm, plans to address this by partnering with two EU nationals, Peter Bellew and Mark Breen, who would own 51% of the bidding vehicle, with Castlelake holding 49%. Peter Bellew is a former chief operating officer for EasyJet.
EasyJet's board had previously rejected Castlelake's approaches, accusing the firm of trying to buy the airline "on the cheap" when its shares were depressed due to factors like the Iran conflict and the impact of the US-Israel war. Despite the agreement in principle, the deal still requires regulatory clearances and approval from EasyJet shareholders. The airline operates around 1,200 routes across 35 European countries and employs over 19,000 people, with valuable landing slots at major European airports like London Gatwick and Paris. Its founder, Stelios Haji-Ioannou, remains the biggest investor with approximately a 15% stake.
