EasyJet has rejected a £4.74bn takeover offer from US investment firm Castlelake, accusing it of attempting to acquire the low-cost carrier 'on the cheap', according to the BBC. Castlelake, which manages funds that already own a 2.14% stake in EasyJet, has made three takeover approaches this month, all of which were rebuffed by the board.
The £4.74bn Offer
Castlelake's latest proposal offers 625p per share, representing a 24% premium to last Friday's closing price, the BBC reported. The firm made the details public to allow shareholders to assess the proposal. Under UK takeover rules, Castlelake has until Friday to make a firm offer or walk away.
'Following the rejection of three proposals by the EasyJet Board, and given its unwillingness to engage meaningfully, Castlelake is announcing this Third Proposal to enable EasyJet shareholders to consider its merits,' Castlelake said in a statement reported by the BBC.
Strategic Rationale and Regulatory Structure
Castlelake described its ambition to 'support EasyJet as a stronger, more resilient European airline under European control, respecting EasyJet's valuable airline assets and continuing to sustain its network,' the BBC reported.
European Union regulations require EasyJet to be majority-owned by EU citizens. To address this, Castlelake proposed a partnership with two EU nationals: Peter Bellew and Mark Breen. They will own an EU-based company that will hold majority control of the airline. Bellew is a former chief operating officer of EasyJet and also held the same role at Ryanair. He left EasyJet in 2022 after a turbulent period marked by staff shortages and mass cancellations. Breen runs an aerospace consultancy and has held senior roles at airlines in the Middle East.
EasyJet's Rejection and 'Opportunistic' Claim
EasyJet, one of Europe's largest airlines, carried more than 90 million passengers last year and operates across 38 countries on more than 1,200 routes, according to the BBC. The carrier accused Castlelake of making a 'highly opportunistic' offer, arguing that its share price had been 'temporarily depressed' partly due to the impact of the Iran war on the travel sector.
EasyJet also criticised the proposed ownership structure as 'opaque', stating it 'did not present any basis for assessing the deliverability of the takeover plan,' the BBC reported.
The Bidders: Castlelake, Bellew and Breen
- Castlelake: A US investment firm with approximately 2.14% of EasyJet through its managed funds.
- Peter Bellew: Former COO of EasyJet and Ryanair; left EasyJet in 2022.
- Mark Breen: Runs an aerospace consultancy; former senior airline executive in the Middle East.
Castlelake's proposal marks a significant attempt to take control of a major European airline. However, with the board's firm rejection and regulatory hurdles, the bid faces substantial uncertainty. The key next milestone is Friday's deadline for Castlelake to either commit to a firm offer or abandon the pursuit entirely.
