EasyJet agrees ‘in principle’ to £5.2bn offer from US investor
EasyJet has accepted in principle a £5.2 billion takeover offer from a US investment firm.
The airline had previously rejected four offers from Castlelake, a private lender that currently holds about 2.14 per cent of EasyJet shares, describing its initial interest in the acquisition as “highly opportunistic” and accusing it of trying to buy the company “on the cheap”.
The travel company’s board said on Sunday it had agreed in principle to an offer worth £6.90 per share. Previously rejected offers were worth £6.50, £5.60, £6 and £6.25.
While this does not mean a deal has been confirmed, the airline’s board said the financial terms of the proposed offer “are of a value that the Board can recommend to easyJet shareholders”.
Regulatory permits and approvals are still required for the transaction to take place.
Castlelake has until 5pm (BST) on 3 August to announce its intention to make a firm offer or to state that it does not intend to make an offer.
Any definitive proposals would then need to be put to a vote by shareholders before being finalised.
Negotiations between the two companies have been marred by candid public statements, including accusations from Castlelake that EasyJet has shown itself to have failed to “engage meaningfully”.
Following the announcement of the deal in principle, the firm said it “highlights its great respect for easyJet and its employees, as well as its intention to support its future growth and transformation into a stronger, more resilient European airline.”
EasyJet has expressed doubts about Castlelake’s initial interest, saying the company’s interest in the acquisition comes at a time when its share price has fallen due to concerns about the impact of the Iran war on the airline industry.
Shares in the FTSE 250 firm fell nearly 30 per cent last year before the company announced a tender interest.
At the time, easyJet said there were “significant regulatory, financial and other implementation challenges associated with the potential acquisition of easyJet”.
Castlelake, led by chairman and founder Rory O’Neill, had previously rescued the failing Scandinavian Airlines (SAS), then sold its shares to Air France-KLM, and began negotiations to take over the bankrupt US carrier Spirit Airlines in January.
The company has US$36bn (£27.3bn) worth of assets under management.
