US private equity firm Castlelake has made a public proposal to acquire all shares of EasyJet, sending the low-cost carrier's shares up 12% in early trading on Monday. The offer values EasyJet at more than £2.5 billion, according to sources familiar with the matter.
Proposal details and shareholder reaction
Castlelake, which already holds a 15% stake in EasyJet, proposed to buy the remaining shares at a price of 550p per share, a premium of about 30% over Friday's closing price. The proposal was made public after EasyJet's board rejected earlier private approaches, saying the price undervalued the company.
EasyJet's largest shareholder, founder Sir Stelios Haji-Ioannou, who owns about 34% of the airline, has not yet publicly commented on the proposal. However, analysts expect him to demand a higher price given his history of opposing deals he considers too cheap.
EasyJet's financial performance and market context
EasyJet has struggled to recover from the pandemic, with its share price still below pre-Covid levels. The airline reported a pre-tax loss of £178 million for the first half of its financial year, though it expects to return to profitability in the summer. Castlelake's proposal comes amid a wave of consolidation in the European airline industry, with rivals like Ryanair and Wizz Air also facing takeover interest.
“Castlelake's offer reflects the underlying value of EasyJet's brand and network, but we believe the company is worth more given its recovery trajectory and strategic assets such as Gatwick slots,” said an analyst at Bernstein, who rated the stock as 'outperform'.
Regulatory and strategic implications
The deal would require approval from UK and EU competition authorities, given Castlelake's existing investments in other airlines. The firm also owns stakes in Air France-KLM and has investments in aircraft leasing. EasyJet's board has stated it will evaluate the proposal and engage with shareholders, but has not set a deadline for a decision.
If successful, the acquisition would take EasyJet private, allowing Castlelake to restructure the airline away from public market pressures. The proposal includes plans to maintain EasyJet's headquarters at London Luton Airport and keep its current management team led by CEO Johan Lundgren.
