Shares in British low-cost carrier EasyJet rose sharply on Monday after the company's board announced it had reached an agreement in principle with US investment firm Castlelake on the key financial terms of a potential takeover. The deal values the Luton-based airline at more than £5 billion (€5.84 billion), marking the culmination of a month-long negotiation process.
In a statement released on Sunday, EasyJet confirmed that its board and Castlelake had agreed on a price of £6.90 per share in cash, with the option of a partial unlisted share alternative. The proposal, the fifth from Castlelake, was submitted on 4 July 2026. EasyJet shares were trading at around £6.19 by mid-morning on Monday, representing a gain of more than 10%.
From Rejection to Agreement
Castlelake first publicly signalled its interest in EasyJet at the end of May. The airline initially responded on 1 June by stating that its board had not held any discussions with the investment firm and had received no formal approach, indicating that the process began as an unsolicited expression of interest. EasyJet subsequently rejected several earlier proposals, including an offer of £6.25 per share.
The board now says it would be minded to recommend an offer to shareholders at the agreed price, provided Castlelake announces a firm intention to make an offer and the remaining terms and conditions are finalised. However, no legally binding firm offer has yet been made.
The potential acquisition comes at a turbulent time for the aviation sector, which continues to grapple with elevated jet fuel costs and shifting consumer demand. A change in ownership could also raise questions about EasyJet's future strategy, employment conditions, and ticket pricing across its European network.
Castlelake has sought to reassure stakeholders, stating in the release that it has "tremendous respect for EasyJet and its people" and intends to support the airline's growth and transformation into "a stronger, more resilient European airline." The firm also endorsed EasyJet's fleet modernisation programme, which it described as "central to the Company's long-term competitiveness, efficiency and sustainability objectives."
The deal remains subject to several pre-conditions, including satisfactory due diligence and the agreement of definitive transaction documentation. Castlelake now has until 5 pm on Monday, 3 August 2026, to either announce a firm intention to make an offer or confirm that it does not intend to proceed. The firm has also committed to a "best endeavours" clause in any cooperation agreement to secure the necessary regulatory clearances.
EasyJet operates across dozens of European routes, with bases in cities including London Gatwick, Geneva, Milan Malpensa, and Berlin Brandenburg. The outcome of this takeover bid could have ripple effects for competition and connectivity in the continent's budget airline market, particularly as the industry faces ongoing cost pressures and environmental scrutiny.
