EasyJet has firmly declined a £4.7 billion acquisition proposal from US investment firm Castlelake, characterizing the bid as an attempt to purchase the airline 'on the cheap.' The low-cost carrier emphasized that this recent interest from Castlelake has been 'highly opportunistic' and came during a period of diminished share prices, largely attributed to ongoing uncertainties in the travel industry.
This marks the third bid Castlelake has made to acquire EasyJet this month, all of which have been rebuffed. The American firm is now making their offer public, urging EasyJet shareholders to consider the terms. According to regulatory stipulations, Castlelake has until Friday to submit a definitive proposal or withdraw from the negotiations entirely.
EasyJet, which stands as one of Europe’s largest airlines, has serviced over 90 million passengers in the past year alone, operating across 38 countries and more than 1,200 routes. The airline's management expressed concern that Castlelake's offer fails to reflect its long-term potential, with the company arguing that the current share price is 'temporarily depressed' due to factors such as the impact of the war in Iran on global travel.
Castlelake's latest offer promises shareholders £6.25 per share—an enticing 24% premium over the closing share price from last Friday. The investment firm asserts its bid represents 'compelling value' for EasyJet's stakeholders. In light of the EasyJet board’s repeated refusals to engage constructively, Castlelake released this third proposal as a means for shareholders to evaluate its merits independently.
Castlelake aims to fortify EasyJet as a resilient European airline while adhering to European Union ownership regulations, which require that the carrier be majority-owned by EU citizens. To comply, Castlelake has suggested an ownership structure involving a partnership with EU nationals Peter Bellew and Mark Breen. Together, they would run an EU-based company to ensure majority control over EasyJet.
Peter Bellew previously served as EasyJet's Chief Operating Officer and has extensive experience in the airline sector, including roles at Ryanair. Mark Breen leads an aerospace consultancy and has held senior positions across various airlines, notably in the Middle East. However, EasyJet has described this proposed ownership arrangement as 'opaque' and has raised questions about the viability of the takeover.
As discussions continue in the backdrop of a turbulent airline industry, the future of EasyJet and its relationship with Castlelake remains uncertain as shareholders await a conclusive response.
Source: BBC News - Business