.webp)
DALLAS — In an update on a story that Airways has been following, Reuters and other major outlets are reporting that easyJet (U2), the British budget airline, has agreed in principle to a raised takeover bid from U.S. investment firm Castlelake. The bid values U2 at up to £5.5 billion ($7.34 billion).
The new offer comes in at £6.90 (US$9.21) per share, a 73% premium to easyJet's closing price on May 29, the day Castlelake’s fund manager disclosed its interest in the airline to British regulators. Shares have risen sharply since then. The deal would take U2 private.
A fierce competitor to Ryanair (FR), U2 had been viewed as a takeover target for its valuable landing slots at airports including London Gatwick (LGW), Paris (CDG and ORY), and Geneva (GVA). This despite falling ticket sales due to the conflict in the Middle East.
A £4.93 billion (US$6.58 billion) proposal from Castlelake in June was rejected. But the airline signaled an interest in continuing talks. U2 granted the private equity manager some access to the airline’s commercial data.
According to the Reuters report, today, easyJet's board said that the latest bid was at "a value that the Board would be minded to recommend to easyJet shareholders." However, Castlelake would need to submit its intention to make a final firm offer by August 3.
According to the Guardian, if the deal is completed, it could be worth nearly £800m (US$1.068 billion) for easyJet’s founder, Stelios Haji-Ioannou, who still owns more than 15% of the company along with his family.
EasyJet is headquartered at Luton (LTN) airport north of London. It operates from 164 airports in 38 countries, employing 19,000 people.
Castlelake said in a statement that it “has emphasized its tremendous respect for easyJet and its people, along with its intention to support its future growth and transformation to a stronger, more resilient European airline for the benefit of all stakeholders if the transaction proceeds to completion”.
Featured image: Lorenzo Giacobbo/Airways
.avif)