EasyJet rejected on Monday, June 22, a £4.74 billion ($6.4 billion) takeover proposal from U.S. investment firm Castlelake, accusing the investor of attempting to acquire the carrier at an undervalued price amid temporary market pressures.
The airline said Castlelake’s latest offer significantly undervalues the business and described the bid as “highly opportunistic”, arguing that its share price had been temporarily weakened by geopolitical tensions affecting the travel sector. According to easyJet, the proposal fails to reflect the company’s long-term prospects and market position as one of Europe’s largest airlines.
Castlelake Makes Bid Public After Repeated Rejections
U.S. private equity firm Castlelake said it had made three separate approaches to easyJet this month, all of which were rejected by the airline’s board. The investment firm subsequently disclosed details of its latest proposal publicly, saying it wanted shareholders to have an opportunity to evaluate the offer.
Under U.K. takeover regulations, Castlelake has until Friday to either submit a formal bid or withdraw its interest. The latest proposal values easyJet shares at 625 pence each, representing a 24% premium to the airline’s closing share price last Friday, according to Castlelake.
The U.S. firm, which manages funds holding approximately 2.14% of easyJet shares, said the offer provides “compelling value” for shareholders.
“Following the rejection of three proposals by the EasyJet Board, and given its unwillingness to engage meaningfully, Castlelake is announcing this Third Proposal to enable EasyJet shareholders to consider its merits,” the firm said. statement.
According to the BBC, Castlelake added that its goal is to support easyJet as “a stronger, more resilient European airline under European control” while maintaining the carrier’s network and operational assets.
EasyJet carried more than 90 million passengers last year and operates more than 1,200 routes across 38 countries, according to the airline.
Ownership Plan Faces Questions Over Regulatory Compliance
Because European Union regulations require easyJet to remain majority-owned by EU citizens, Castlelake outlined a proposed ownership structure intended to meet those requirements, the BBC reported.
According to the investment firm, the arrangement would involve a partnership with Irish aviation executives Peter Bellew and Mark Breen. Under the proposal, an EU-based company controlled by the two businessmen would hold majority control of the airline.
EasyJet questioned the viability of the proposed structure, describing it as “opaque” and saying it provided no clear basis for assessing whether the takeover plan could be successfully implemented. The airline reiterated its opposition to the offer, maintaining that Castlelake’s proposal does not adequately reflect easyJet’s value or future growth potential.
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