US investment firm Castlelake has made public its £4.7 billion bid to acquire easyJet after the airline turned down its third proposal, intensifying an ongoing takeover contest. The latest all-cash bid from Castlelake values easyJet at 625 pence per share, following previous offers of 560p and 600p that were also rejected. By revealing the proposal publicly, the Minneapolis-based firm, which manages around $36 billion in assets, aims to give shareholders the opportunity to evaluate the offer before the June 26 deadline for the takeover bid.
Castlelake has expressed dissatisfaction with what it perceives as the easyJet board’s lack of meaningful engagement with its proposals. In a strategic move to comply with European ownership regulations that mandate EU airlines be majority-owned by European investors, Castlelake has joined forces with aviation executives Peter Bellew and Mark Breen. According to the proposed plan, an EU-controlled entity would hold the majority stake in easyJet, thereby meeting regulatory requirements.
EasyJet, however, has strongly dismissed the proposal, characterizing it as an opportunistic bid to acquire the airline at a reduced valuation. The company argues that the offer comes at a time when its share price is still impacted by geopolitical uncertainties and does not adequately reflect its long-term growth potential. EasyJet has also raised concerns about the transparency of Castlelake’s proposed ownership structure and maintains that the offer undervalues the business and its future prospects.
Despite the rejection, speculation surrounding the takeover has positively influenced easyJet’s market performance, with its shares rising by about 40% over the past month. The airline’s stock continued to trade higher following the announcement by Castlelake. Headquartered in Luton, easyJet is one of Europe’s major budget airlines, positioned between Ryanair and Wizz Air in the low-cost carrier market.
As the June 26 deadline approaches, Castlelake faces the decision of whether to make a formal takeover offer or step away from the deal. The unfolding situation reflects the tensions and challenges of navigating regulatory landscapes and shareholder interests in large-scale acquisitions.