EasyJet has rejected a £4.74 billion ($6.26 billion) takeover approach from US investment firm Castlelake, describing the bid as 'opportunistic' and not in the best interests of shareholders. Castlelake, which manages around $38 billion in assets, made its proposal public on Monday, increasing pressure on the budget airline's board ahead of a June 26 deadline for shareholders to consider the offer.
The proposed price of £6.25 per share represents a 57% premium to EasyJet's share price on May 29, before Castlelake first disclosed its interest. Shares in the carrier, founded by Stelios Haji-Ioannou in 1995, rose more than 5% in early trading to £5.30, their highest level in nearly a year. Castlelake has made two previous bids of £5.6 and £6 per share, both rejected by EasyJet.
EasyJet said in a statement that the board believes the third proposal is an 'opportunistic attempt to acquire EasyJet on the cheap' and does not serve shareholders' interests. The airline emphasised its focus on medium-term targets and the growth of its holidays business, which has become an increasingly important profit driver.
Castlelake has partnered with former Malaysia Airlines CEO Peter Bellew and another EU national, Mark Breen, to address European ownership rules requiring EU majority ownership and control. Bellew previously served as chief operating officer at Ryanair, Riyadh Air, and EasyJet. However, EasyJet argued that the proposed ownership structure is 'opaque' and unsuitable for evaluating the bid.
Analyst Dudley Shanley of Goodbody Stockbrokers noted that EasyJet equity investors might be disappointed by the lack of a European airline partner in the bid. Castlelake said its offer is fully funded through committed equity and debt, with Goldman Sachs expressing confidence in arranging the necessary funds.
