EasyJet has rejected a fourth takeover offer worth £4.93bn from the US investment firm Castlelake — but then agreed to open its books in the hope of a higher bid.
The Luton-based low-cost carrier said the proposal of 650p a share still “substantially undervalued” the company and raised “significant questions of deliverability”. The board unanimously rejected the bid, which followed previous offers of 560p, 600p and 625p a share.
“EasyJet rejects £4.93bn Castlelake offer but opens talks for a higher bid.”
Yet in a statement on Thursday, easyJet signalled a slight thaw. It said giving Castlelake access to “limited commercial information” might produce “a more attractive proposal that better reflects the value of easyJet”.
The airline added that it remained “concerned about the ownership structure and deliverability of any offer”. Castlelake, which already holds a small stake in easyJet, has assets under management of $38bn (£28bn). Under the proposed deal, easyJet would be 49% owned by Castlelake and co-investors including Brookfield Asset Management, with 51% held by individual EU investors — a structure needed to maintain the airline’s EU operating licence.
The takeover interest comes at a time when easyJet’s share price had fallen by about 30% over the past year, partly because of concerns about the consequences of the Iran war. Shares rose 6% on Thursday to 573p.
Castlelake now has until 5pm on 5 July to improve its offer or walk away, extended from an earlier deadline of 26 June. The Minneapolis-based firm welcomed the “constructive engagement” and the nine-day extension. It hopes to improve its bid after scrutinising easyJet’s books.
“The board believes that giving Castlelake access to limited commercial information … might produce a more attractive proposal,” easyJet said. The ball is now in Castlelake’s court, with the clock ticking towards a final decision.