EasyJet agrees to recommend an offer at £6.90 per share from US fund Castlelake, subject to firm intention.
The British airline EasyJet announced on Sunday that it had reached an “agreement in principle” on the main terms of a takeover offer by the American investment company Castlelake, which would value the company at more than 5 billion pounds.
An offer at 6.90 pounds per share
EasyJet’s board of directors says it is “willing to recommend to shareholders” that they accept this proposal at 6.90 pounds per share “if a firm intention” to launch an offer was actually announced. At this price, EasyJet is valued at £5.23 billion, or $6.94 billion. Castlelake initially had until Sunday to make a firm offer, but that deadline has now been extended to August 3. “There is no certainty” that such an offer will ultimately be submitted, the company emphasizes.
This agreement in principle puts an end to several months of standoff. EasyJet had rejected the fund’s first proposals, including one at 6.50 pounds per share, deeming one of them “highly opportunistic, formulated in the context of a temporarily depressed EasyJet share price” due to the situation in the Middle East, which is weighing on airlines. The company, however, opened the door to dialogue on June 25, granting the American fund “access to limited commercial information” in the hope of obtaining a better proposal.
Castlelake, a heavyweight in aeronautical leasing
Founded in 2005, Castlelake manages approximately $38 billion in assets, particularly in aerospace. A major player in air leasing, the fund has a fleet of 375 aircraft leased to companies such as Etihad, Qantas, Air India Express, Frontier and Viva. It also acquired around 32% of the Scandinavian company SAS in 2023, a stake currently being bought by Air France-KLM.
According to EasyJet’s statement, Castlelake expressed his “deep respect” for the company and his intention to “support its future growth and transformation into a stronger European airline.” The fund would notably support the fleet modernization program, which it considers “central to competitiveness, efficiency and long-term sustainability objectives”. EasyJet had published in May a loss increased over one year in the first half of its staggered financial year, attributed in part to the conflict in the Middle East, and warned that the second half would also be affected.
