The board of British airline EasyJet has rejected a fourth, improved takeover bid from US investment fund Castlelake, but has agreed to grant limited access to its financial and commercial data. The conditional offer valued EasyJet at around £5 billion, or £6.50 per share.
The decision means Castlelake can, under UK takeover rules, submit a binding offer by July 5th. The fund currently holds a 2.41% stake and aims to reach 49%, leaving 51% in the hands of minority shareholders. EasyJet’s board maintains that the company is worth more, citing strong growth prospects and positive cash flow generation.
Castlelake’s revised proposal raised the per-share price from £6.25 to £6.50. The fund manages $38 billion in assets and previously acquired 32% of Scandinavian airline SAS in 2023, a stake now being sold to Air France-KLM.
Castlelake ups the ante
The new offer comes after three previous attempts, all rejected by EasyJet’s management. According to sources close to the negotiations, the fund’s strategy is to gain operational control without delisting the company. Minority shareholders would retain 51% of the shares.
EasyGroup Holding Ltd, the vehicle linked to the Haji-Ioannou family which owns 15% of EasyJet, continues to collect a 0.25% royalty on every ticket sold. This long-standing arrangement is a key point of contention in the takeover talks.
– We believe the company’s long-term potential is not fully reflected in the current offer – stated a spokesperson for EasyJet’s board. – Granting access to our data is a step to demonstrate the underlying value of the business.
Strategic implications and next steps
If Castlelake proceeds, it would mark a significant shift in EasyJet’s ownership structure. The fund has until July 5th to decide whether to make a firm offer. Meanwhile, EasyJet continues to navigate a challenging market environment, with rising fuel costs and intense competition from low-cost rivals.
The airline’s board has consistently argued that its brand, network, and customer base justify a higher valuation. Analysts note that Castlelake’s interest could reflect broader confidence in the European aviation sector’s recovery post-pandemic.
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