Talks continued between Castlelake and easyJet as the airline rejected the U.S. investment firm’s fourth takeover offer. While the discussion is ongoing, the airline has agreed to provide limited access to its commercial data to prompt a higher bid.
Offer Raised but Still Rejected
The latest proposal by Castlelake has valued easyJet at £4.93 billion, or £6.50 per share. This marks an increase from its earlier bids of £5.60, £6, and £6.25 per share. Despite the upward revision, easyJet’s board has stated it is still dissatisfied with the offer, as it falls short of the airline’s long-term prospects.
The airline stated:
“Having carefully reviewed it with its advisers, the board of easyJet continues to regard the fourth proposal as substantially undervaluing the company and its prospects and continuing to give rise to significant questions of deliverability,”
Analysts have raised flags over whether Castlelake can structure a deal that would meet European Union ownership rules. While the board raised concerns about whether any transaction could be successfully completed. Castlelake has been given until July 5 to submit a firm offer or withdraw under UK takeover rules.
Ownership Rules and Market Pressure
In order to build a more attractive deal, easyJet has said it would provide limited access to its commercial information. However, the airline stressed this does not amount to acceptance of the bid. The airline also noted that its share price has been under pressure, falling roughly 30% over the past year amid wider industry concerns, especially the geopolitical tensions affecting fuel costs and demand.
Questions remain over whether Castlelake’s proposed structure would comply with European Union rules requiring airlines to remain majority EU-owned and controlled. Under the plan, Castlelake and co-investors including Brookfield Asset Management would hold 49%, with EU-based investors holding the majority stake.
EasyJet operates more than 350 aircraft across 1,200 routes in 37 countries and remains one of Europe’s largest low-cost carriers, alongside Ryanair. Shares rose by 8%, but remained below Castlelake’s £6.50 per-share offer.
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