By Pushkala Aripaka and Yamini Kalia

Shares in Britain's easyJet LSE:EZJ have fallen nearly 7% over the past week ahead of Sunday's deadline for a takeover offer from Castlelake, as investors prepared for the possibility of no deal after the budget carrier rejected four previous proposals from the U.S. ‌investment firm.

The stock has dropped as much as 6.6% over the past week to a low of £5.45 on Friday, below Castlelake's first bid price of £5.60.

EasyJet last week rejected an improved £4.93 billion ($6.58 billion) takeover approach from Castlelake, or £6.50 a share, but gave it limited access to commercial data in hopes of drawing a higher bid.

Castlelake has until July 5 to make a formal offer for easyJet or walk away under British takeover rules, unless an extension is agreed.

"Recent price action may reflect several broker downgrades and holders taking profits in case a deal is not forthcoming," Barclays analyst Andrew Lobbenberg said, adding that mathematically, the fall reflects a "modest reduction" in implied probability of a deal.

At least four brokerages have cut their recommendations on easyJet since Thursday, LSEG data showed.

Still, easyJet has risen roughly 40% since Castlelake's interest became public in late May, valuing it at about £4.13 billion.

EasyJet has called Castlelake's approaches opportunistic given the Iran war's drag on its shares, but analysts said opening its books effectively left the carrier in play and willing to deal at the right price.

The Financial Times reported last week that easyJet and its investors were holding out for at least £7 a share, citing leading shareholders and people with knowledge of the talks.

EasyJet shares have not traded at £7 or more since early 2022. Castlelake has not indicated whether it would be willing to play ball if it is rebuffed again.

In 2021, easyJet rejected a takeover approach from rival Wizz Air LSE:WIZZ, opting instead to raise money from shareholders.

Analysts have said easyJet's depressed valuation and its portfolio of assets - over 350 aircraft operated across more than 1,200 routes to 37 countries from key European hubs - make it an appealing target.

($1 = £0.7488)