EasyJet (EJTTF), a UK low-cost airline operating across Europe, has agreed in principle to Castlelake LP's fifth takeover proposal, marking a major turn after rejecting earlier bids as too low. The latest all-cash offer of 6.90 per share values EasyJet at 5.2 billion, or 5.5 billion on a fully diluted basis. Shares rose as much as 11% Monday to 6.22 before easing back, still trading below the offer price and signaling investors may remain cautious about the deal's regulatory, political and ownership hurdles.
The deal could matter because EasyJet owns some of Europe's most attractive airline assets, including 356 Airbus A320 family aircraft, 287 planes on order, 100 additional purchase rights, prime landing slots in London, Milan and Geneva, and a holidays business. Castlelake said it has tremendous respect for the airline and its employees and intends to support future growth and fleet modernization, but the companies have not detailed what may happen to EasyJet's assets, management or workforce. That uncertainty may keep investors focused on whether the airline is streamlined, whether any assets are sold, and whether regulators push back on potential competition concerns.
EasyJet has been under pressure from higher jet fuel prices linked to the Iran conflict, a first-half loss and weaker summer bookings, which may have made the airline more vulnerable to a bid. Castlelake first approached the company on May 29 and lifted its proposals from 5.60 to 6.00, 6.25, 6.50 and now 6.90 per share. The consortium also includes Brookfield Asset Management, a global alternative asset manager, as well as Mark Breen and former EasyJet executive Peter Bellew. Because Castlelake is a U.S. entity, it cannot fully control EasyJet under UK and European airline ownership rules, meaning investors may continue watching whether the group can secure the right partner structure before the Aug. 3 deadline for a firm offer.