EasyJet has agreed in principle to a sweetened takeover bid from U.S. investment firm Castlelake, valuing the carrier at up to £5.5 billion ($7.34 billion). The offer of £6.90 per share represents a 73% premium to EasyJet's closing price on May 29, when Castlelake first disclosed its interest. This agreement comes after EasyJet previously rejected four lower offers from Castlelake, including a £4.93 billion proposal.
Castlelake, a private credit group and major lender to airlines, has until August 3 to make a firm offer. The deal could see the 31-year-old EasyJet taken private. While the agreement is in principle, regulatory clearances and approvals are still required. The EasyJet board has indicated they would recommend the offer to shareholders if a firm bid is made.
Analysts note that while the offer provides a decent premium, it remains significantly below EasyJet's share price from the late 2010s, reflecting the airline's struggles, particularly since the COVID-19 pandemic and recent geopolitical conflicts impacting fuel prices. The deal faces potential challenges regarding EU regulations, which require airlines operating in the bloc to be majority-owned and controlled by EU nationals. Castlelake has previously stated it would own 49% of the bidding vehicle, with the remainder held by two EU nationals, including former EasyJet COO Peter Bellew. The proposed deal also includes an option for shareholders, such as founder Sir Stelios Haji-Ioannou, to retain their stake by receiving unlisted shares in the private entity.
