The FTSE 100 remains under pressure as EasyJet's shares plummeted nearly 11% on Wednesday afternoon, hitting 593p amidst reports of an EU review into foreign ownership rules for airlines. The budget carrier's fortunes are entwined with the bloc's regulatory intentions, which aim to "protect strategic autonomy" and maintain control within the EU - a move that could significantly complicate existing takeover bids.
EasyJet's willingness to accept private equity firm Castlelake's £5.7 billion bid was already a subject of debate; now, its decision has become increasingly uncertain as it grapples with the possibility of an EU review. Meanwhile, UK capital markets are facing a wave of significant takeovers, with Segro being "minded to accept" a £14 billion acquisition offer from US property giant Prologis - underscoring the trend of major British companies falling under foreign ownership.
The global market backdrop is also contributing to investor caution. The escalation of tensions between the US and Iran saw US markets decline on Wednesday night, while oil prices surged past $95 a barrel as Brent crude reached levels not seen since early June. This increase follows hawkish comments from figures like Marco Rubio, exacerbating concerns about regional stability and its impact on global energy supplies.
Recent weeks have witnessed an unprecedented number of takeovers in the UK, with 11 deals worth over £1 billion announced this year alone. Facilities management company Mitie's delisting for £3.1 billion serves as a stark reminder of the trend, raising questions about the long-term health and competitiveness of the UK's capital markets.
As EasyJet addresses the market, investors will be scrutinising its statements for clarity on its takeover situation and the potential implications of an EU review. The broader FTSE 100 index is expected to open flat today, reflecting a cautious mood driven by both domestic corporate activity and international geopolitical developments.