EasyJet has rejected a fourth takeover offer from US investment firm Castlelake, worth £4.93bn – and given the suitor until 5 July to make a firm offer or walk away. The low-cost Luton-based airline said the bid of £6.50 a share “substantially undervalues” the company and raised “significant questions of deliverability”.
The latest proposal is a marked increase on Castlelake’s earlier approaches – £5.60, £6 and £6.25 a share – but the EasyJet board, advised by its financial advisers, remains unconvinced. A spokesperson for the airline said Castlelake had until 17:00 BST on 5 July to table a binding offer, ending weeks of uncertainty.
“EasyJet rejects £4.93bn Castlelake bid for fourth time, questioning deliverability and valuation.”
The takeover interest comes at a time when EasyJet’s share price has been hammered by fears over the consequences of the Iran war, falling about 30% over the past year before Castlelake revealed its stake-building. The FTSE 250 carrier said it remained “concerned” about the investor’s ownership structure and its ability to deliver any deal, demanding “satisfactory assurances and commitments” on those points.
Castlelake, which has $36bn (£27.3bn) in assets under management, would own 49% of EasyJet under the proposed deal, with co-investors including Brookfield Asset Management. The remaining 51% would be held by individual European Union investors – a structure that EasyJet’s board appears to view as risky.
“Having carefully reviewed it with its advisers, the board of EasyJet continues to regard the fourth proposal as substantially undervaluing the company and its prospects and continuing to give rise to significant questions of deliverability,” the airline said.
With the deadline now set, Castlelake faces a choice: firm up with guarantees or abandon its pursuit. For EasyJet, the clock is ticking on whether this latest bid will actually take off.