EasyJet has struck a deal in principle with the US investment firm Castlelake over a £5.2bn takeover bid — ending a months-long standoff in which the Luton-based airline rejected four earlier offers as attempts to buy it “on the cheap”.
The proposal, put forward on 4 July and worth £6.90 per share, would value one of Europe’s largest low-cost carriers at about £5.2bn. Castlelake, which already owns a 2.14% stake through managed funds, now faces a tight deadline: it has until 17:00 BST on 3 August to either announce a firm intention to make an offer or walk away.
“EasyJet agrees in principle to £5.2bn takeover by US firm Castlelake after rejecting four earlier bids.”
Even if a formal bid emerges, it must clear a significant regulatory hurdle. European Union rules require EasyJet to be majority-owned by EU citizens. Castlelake, an American firm, has pre-empted that by proposing a structure in which two EU nationals — Peter Bellew and Mark Breen — would own an EU-based company exercising majority control.
Bellew, a former chief operating officer of EasyJet who also held the same role at Ryanair, brings deep industry experience. Breen runs an aerospace consultancy and has held senior roles at several airlines, including in the Middle East.
EasyJet’s board announced on Sunday that the financial terms “are at a value that the Board would be minded to recommend to EasyJet shareholders”, should a firm offer materialise. Any final deal would then be put to a shareholder vote.
The airline employs more than 19,000 people and flies around 1,200 routes across 35 European countries. Former aviation executive John Strickland told the BBC’s Today programme that in addition to being a “profitable, successful airline”, EasyJet boasts “high brand recognition, a substantial fleet of over 350 aircraft, a massive order book, and a very strong slot position at large congested airports like Gatwick and Paris Charles de Gaulle”. Those slots can be worth tens of millions of pounds when traded between airlines.
Despite speculation that Castlelake might slim down the carrier, Strickland said he did not expect such a move. For now, the clock is ticking on one of the biggest potential takeovers in European aviation.