EasyJet Rejects £4.74bn Takeover Bid, Calling it 'On the Cheap'

EasyJet has rejected a takeover offer worth £4.74bn from US investment firm Castlelake, accusing it of trying to buy the airline "on the cheap."

The carrier's comments came after Castlelake said it had made three takeover approaches to the airline this month, all of which had been rejected.

The US firm has now made details of its latest offer public to allow shareholders to assess the proposal. Under stock market rules, Castlelake has until Friday to make a firm offer or walk away.

EasyJet is one of Europe's largest airlines, and last year carried more than 90 million passengers. It operates across 38 countries on more than 1,200 routes.

The carrier repeated its accusation that Castlelake's offer was "highly opportunistic", arguing that its share price had been "temporarily depressed" partly due to the impact of Iran war on the travel sector.

Under Castlelake's latest offer, the airline's shareholders would receive 625p per share, a 24% premium to last Friday's closing price.

The US firm- which already owns a stake of about 2.14% in EasyJet through the funds it manages - said its latest bid "offers compelling value" to the carrier's shareholders.

"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.

"Castlelake's ambition is 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."

European Union regulations stipulate that EasyJet must be majority-owned by EU citizens. Castlelake said it had proposed an ownership structure which was a "deliverable solution to ensure compliance with all applicable regulatory requirements."

This will involve Castlelake going into partnership with two EU nationals, businessmen Peter Bellew and Mark Breen. They will own an EU-based company which will have majority control of the airline.

Peter Bellew is a former chief operating officer of EasyJet, who has also held the same role at Ryanair. He left EasyJet in 2022, after a turbulent period in which staff shortages led to major disruption, including a large number of cancellations.

Mark Breen runs an aerospace consultancy, and has previously held senior roles at a number of airlines, including several in the Middle East.