The £4.74 billion offer from Castlelake to acquire EasyJet has been firmly rejected by the airline's board, with executives accusing the US investment firm of attempting to 'buy on the cheap' at a time when share prices are temporarily depressed due to broader geopolitical tensions. Despite this, the latest bid from Castlelake still represents a 24% premium over last Friday's closing price, offering EasyJet shareholders 625p per share.
EasyJet, one of Europe's largest airlines, has seen its operations severely impacted by the pandemic, transporting just under 90 million passengers in 2022 across more than 1,200 routes in 38 countries. The airline claims that Castlelake's offer is 'highly opportunistic', arguing that its current share price undervalues the business.
Castlelake, which already holds a 2.14% stake in EasyJet through managed funds, asserts that its latest proposal offers 'compelling value' for shareholders. The firm has proposed a partnership with two EU nationals, businessmen Peter Bellew and Mark Breen, to address regulatory concerns surrounding the takeover. This arrangement would see an EU-based company, majority-controlled by Bellew and Breen, holding the controlling stake in the airline.
However, EasyJet remains unconvinced about this proposed structure, describing it as 'opaque'. The airline has expressed significant reservations regarding the plan's deliverability and feasibility, suggesting concerns about regulatory compliance and long-term stability. The move now appears to be a stalemate, with Castlelake having invited shareholders to assess its merits ahead of a Friday deadline for a firm offer or withdrawal.