UK budget airline easyJet ready to accept $7.3 billion takeover bid from Castlelake
British budget airline easyJet has agreed in principle âto a sweetened takeover bid âfrom U.S. investment firm Castlelake âthat values the carrier at up to £5.5 billion ($7.34 billion), it said on Sunday, a potential shakeup for Europe's aviation sector.
The new offer at £6.90 a share represents a 73% premium to easyJet's closing price on May 29, when the private equity â fund manager âdisclosed its interest in the airline to British regulators, driving the â shares up steeply since then.
The deal, which would see the U.S. investor take easyJet, a 31-year-old airline, private, coincides with operating challenges for airlines globally as they grapple with sharply higher fuel prices and profit pressure due to the Iran conflict.
Locked in fierce competition with rival Ryanair, easyJet âhad long been viewed as a takeover target with its valuable landing slots at airports including London Gatwick, Paris and Geneva attractive to potential bidders. In June, EasyJet rejected a £4.93 billion proposal from Castlelake but signaled its interest in continuing talks by granting the private equity manager limited access to the airline's commercial data.
On Sunday, easyJet's board said that the latest bid was at "a value that the Board would be minded to recommend to easyJet shareholders," though it added that Castlelake now needed to submit â its firm intention to make an offer by Aug. 3.
Castlelake, which is a major lender to airlines and has leased airplanes to âabout 200 airlines, declined to comment beyond its joint announcement of the deal âwith easyJet, citing regulatory restrictions.
Analysts had raised questions about whether Castlelake could meet European Union regulations requiring airlines operating in the bloc to be majority-owned and controlled by EU nationals. While this was not mentioned in â Sunday's deal, Castlelake previously said it would own 49% of the bidding vehicle, with the remainder held by â two EU nationals, former Malaysia Airlines CEO Peter Bellew and senior industry executive Mark Breen. â Bellew was easyJet's chief operating officer from 2019 to 2022.
EasyJet, which flies low-cost routes in 38 European countries, operates 355 aircraft across more than 1,200 routes and has struggled to recover âsince the Covid-19 pandemic. But its package holidays business and âefficient Airbus fleet have been bright spots. British Cypriot entrepreneur Stelios Haji-Ioannou, who founded easyJet in 1995, left the board in 2010 but remains the largest shareholder with a roughly 15% stake, held alongside his family. He has had a history of public clashes with management over growth plans.
The British market is on course to set a record for mergers and acquisitions in 2026 as weaker âvaluations among London-listed companies attract buyers. EasyJet initially âsaid Castlelake's approach was "highly opportunistic" as the Iran war turmoil depressed its shares.