The £5.5 billion takeover bid from US private equity firm Castlelake has sent EasyJet's share price soaring by almost 10%, valuing each EasyJet share at a substantial £6.90. This latest offer represents the fourth attempt by Castlelake to acquire the airline, following previous bids that were rejected by the board in favour of higher offers. With the City takeover regulations dictating that a formal bid must be tabled by August 3rd, Castlelake's intentions are clear: to secure EasyJet's future growth and competitiveness.
Crucially, the agreement includes provisions for current shareholders to retain their investment in EasyJet, even if the company is subsequently delisted following acquisition. This concession is notable, as it diverges from typical takeover practices where shareholders often have little choice but to divest their holdings. Notably, Stelios Haji-Ioannou, EasyJet's founder and largest single shareholder with approximately 15% ownership alongside his family, has yet to comment publicly on the bid.
The implications of this deal extend beyond EasyJet's immediate future, however. Industry analysts are weighing in on the valuation of UK-listed firms, with some suggesting that many corporates remain undervalued and ripe for overseas acquisition. Kathleen Brooks, research director at brokerage firm XTB, observed that the acquisition of an 'iconic British aviation name' by a US private equity firm is symbolic of broader market trends, where UK equities are seen as underperforming and undervalued. Garry White, chief investment commentator at Raymond James, echoed these sentiments, noting that the increasing number and size of overseas takeover bids indicates a perception among investors that many UK-listed companies are being sold off on the cheap.
Not all analysts share this view, however. Andrew Lobbenberg from Barclays countered that the bid price represents 'good value to shareholders' while also offering Castlelake an opportunity for growth. He noted that markets often underestimate companies ahead of substantial capital investment, and anticipates no radical shift in EasyJet's business plan under new ownership. With EasyJet employing 19,000 people and transporting around 93 million passengers annually, the implications of this deal will be closely watched by investors and analysts alike.
Source: XTB, Raymond James, Barclays