EasyJet Takeover Bid Advances As Board Backs $7.3B Offer
easyJet takeover bid had the board signal likely support for Castlelake's sweetened cash proposal, sharpening trader focus on the Takeover Panel deadline.
KEY TAKEAWAYS
- Board reached agreement in principle and said it would be likely to recommend Castlelake's improved terms.
- The Takeover Panel extended the put up or shut up deadline to Aug. 3, 17:00 BST.
- The proposal values easyJet at up to £5.5 billion fully diluted and carries a material premium.
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easyJet plc said on July 5 that its board had reached an agreement in principle with Castlelake on a takeover bid and would likely recommend the terms if a firm offer is made. The UK Takeover Panel extended the "put up or shut up" deadline to August 3, 17:00 BST.
Board Backing and Timeline
easyJet described the accord as an outline agreement that does not constitute a formal offer under the UK Takeover Code. Castlelake must announce a firm intention to make an offer or confirm it will not proceed by the panel’s deadline. The proposal remains non-binding and is subject to due diligence, regulatory approvals, and shareholder approval.
The bid process began on May 29, when Castlelake disclosed it was considering an approach. In June, the U.S. investment firm submitted a series of private bids: £5.60 per share on June 12, rejected on June 16; £6.00 on June 17; and £6.25 disclosed on June 22. Castlelake then offered £6.50 on June 23, which easyJet rejected on June 25 while setting an early-July deadline for an improved offer. Castlelake submitted the latest £6.90 proposal in early July.
Deal Terms and Ownership Structure
The Castlelake takeover offer values easyJet’s equity at about £5.2 billion on a basic basis and up to £5.5 billion fully diluted, roughly $7.3 billion. The terms represent a 73.0% premium to easyJet’s closing price on May 29, when Castlelake first disclosed interest, and about a 24.0% premium to the session before the July announcement.
Castlelake is a U.S. aviation-focused investment and credit firm managing approximately $36 billion in assets. It currently holds about 2.1% of easyJet shares through managed funds. To comply with EU rules requiring airlines to be at least 51% owned and controlled by EU nationals, the proposed bidding vehicle would be 49% owned by Castlelake and 51% by EU nationals, including Peter Bellew and Mark Breen.
If a firm offer is made and accepted, the transaction would take easyJet private, removing it from public markets and altering its capital structure and governance. Castlelake has expressed its intention to support easyJet’s growth and fleet modernization, aiming to strengthen the airline’s position as a resilient European carrier.
