EasyJet has agreed in principle to a sweetened takeover proposal from Castlelake that values the UK budget airline at up to £5.5bn ($7.3bn), according to a report by Reuters.
The offer, at £6.90 per share, represents a 73% premium to easyJet’s closing share price on 29 May, when Castlelake first disclosed its interest in the carrier. The bid follows a previous £4.93bn proposal from the US investment firm, which easyJet rejected in June.
The deal would take easyJet private at a time of pressure for the aviation sector, with airlines facing higher fuel costs and margin pressure linked to the Iran conflict. EasyJet, which operates 355 aircraft across more than 1,200 routes in 38 European countries, has long been viewed as a potential takeover target because of its valuable airport slots, including at London Gatwick, Paris and Geneva.
EasyJet’s board said the latest proposal was at a value it would be minded to recommend to shareholders. Castlelake has until 3 August to submit its firm intention to make an offer.
A potential transaction could face scrutiny under EU ownership rules, which require airlines operating in the bloc to be majority owned and controlled by EU nationals. Castlelake has previously said it would own 49% of the bidding vehicle, with the remainder held by two EU nationals: former Malaysia Airlines CEO and easyJet COO Peter Bellew, and aviation executive Mark Breen.
Castlelake is a major lender to airlines and has leased aircraft to around 200 carriers. EasyJet founder Stelios Haji-Ioannou remains the company’s largest shareholder, with a stake of around 15% alongside his family.
