British low-cost carrier EasyJet has rejected three informal takeover proposals from US private equity firm Castlelake, with the latest bid valued at nearly €5.9bn (£5bn). The airline's board described the approach as 'highly opportunistic' given the current market conditions.
Castlelake, which publicly declared its interest in the airline last month, said on Monday it would appeal directly to EasyJet shareholders to consider the 'merits' of its latest offer. Under UK takeover rules, the firm has until Friday to table a formal bid or withdraw for six months.
The third proposal offered £6.25 per EasyJet share, a premium of about 59 percent compared to the share price in late May, before Castlelake disclosed its interest. However, EasyJet shares traded at £5.21 on Monday, up 3.4 percent but still well below the offer price, suggesting investors doubt the deal will succeed.
'The market doesn't believe Castlelake will succeed, given how the shares are significantly below the latest bid,' said Dan Coatsworth, head of markets at AJ Bell.
Board's Confidence in Strategy
EasyJet's board reiterated its confidence in the airline's standalone strategy, stating that it 'remains highly confident in EasyJet's strategy and its ability to deliver attractive long-term value for shareholders.' The carrier, which operates primarily across European routes, has faced headwinds from rising jet fuel costs, exacerbated by the conflict in the Middle East, as well as broader economic uncertainty.
The rejection comes as European airlines navigate a complex landscape of post-pandemic recovery, geopolitical tensions, and fluctuating demand. EasyJet, headquartered at London Luton Airport, has been focusing on expanding its network within Europe, including new routes to destinations in the Balkans and North Africa.
Castlelake's interest underscores the continued appeal of European aviation assets to US private equity, despite sector volatility. The firm, which manages around $23bn in assets, has previously invested in aircraft leasing and aviation services.
EasyJet's board has not ruled out engaging with potential bidders in the future but insists that any offer must reflect the company's long-term prospects. The airline's summer schedule remains robust, with capacity expected to reach pre-pandemic levels, though profit margins remain under pressure from fuel costs and airport charges.
For now, the ball is in Castlelake's court. If it fails to make a formal bid by Friday, it will be barred from making another approach for six months under UK takeover rules. The standoff highlights the tension between short-term investor opportunism and the board's vision for sustainable growth in a competitive European market.
