A £4.7 billion bid to acquire easyJet has reignited concerns about the UK's largest budget airline, with shareholders set to face a critical decision by the end of this week. US investment firm Castlelake, which manages approximately £27 billion in assets globally, has publicly disclosed its latest all-cash offer of 625p per share, valuing the company at just over £4.7 billion. This is the fourth bid from Castlelake, with earlier offers rejected at 560p and 600p per share by easyJet's directors.
Under City takeover regulations, Castlelake has until 5pm on Wednesday, June 26th to declare its firm intention to make an offer for easyJet. The firm is attempting to bypass the board's 'unwillingness to engage meaningfully' and give shareholders a say in the matter ahead of a looming deadline. Notably, this approach also addresses regulatory hurdles surrounding EU ownership requirements by partnering with two European investors.
Castlelake has formed a partnership with Peter Bellew, former chief operating officer at easyJet and Ryanair, and Mark Breen, CEO of Dublin-based Oneiros Aerospace. This strategic move is intended to establish an EU company controlled by EU nationals holding a controlling shareholding in the acquisition, thereby ensuring compliance with European regulatory requirements. However, this has been met with criticism from easyJet's board, who argue that Castlelake's offer fundamentally undervalues the airline and its future prospects.
EasyJet's directors have labelled Castlelake's bid as an 'opportunistic attempt to acquire easyJet on the cheap', citing a 'temporarily depressed share price' influenced by external factors such as Middle East conflicts. They also raised concerns about the proposed ownership structure, labelling it 'opaque'. The airline's shares have indeed experienced significant volatility, with a 36% surge over the last month amid takeover speculation.
It is not the first time easyJet has faced acquisition interest; previous bids from Swiss shipping company MSC and rival Wizz Air in 2021 were both rejected. This latest development adds to uncertainty surrounding the airline's future ownership, leaving shareholders with a crucial decision by week's end.