EasyJet has spurned Castlelake's fourth bid, a £4.9bn offer worth £6.50 per share, citing concerns over undervaluation and ownership structure. Despite this rejection, the UK-based budget airline has indicated it is open to a "more attractive proposal" from the US private equity firm.
The FTSE 250 company's board has expressed significant reservations regarding Castlelake's proposals, which would see 49% ownership by the private equity firm and 51% held by EU nationals. EasyJet believes this structure would be time-consuming to implement and could erode offer value.
Castlelake's earlier bids have been met with scepticism from EasyJet, with the airline labelling them "opportunistic". However, following Thursday's rejection, Castlelake made a public appeal to investors, urging them to review its proposal and lobby for engagement. The airline's shares responded positively to this news, rising 5% in early trading to reach 567p.
Major shareholders have reportedly been advising EasyJet to hold out for an even higher offer, with some suggesting that £7 per share could be a more acceptable price point for engagement. This would value the airline at around £5.2bn, significantly above Castlelake's latest bid.
A potential revised bid from Castlelake may yet materialise, given EasyJet's willingness to provide commercial information to assist in developing a revised offer. However, with no guarantee of success, the airline's board will remain cautious in its engagement with the private equity firm.