EasyJet has dismissed a potential £3bn takeover bid from US investment group Castlelake as 'highly opportunistic', as shares in the airline surged to a three-month high. Castlelake, a private credit firm based in Minneapolis, announced on Friday it was considering an offer for the airline, valuing it at a minimum of 403p per share.
On Monday, Castlelake revealed it had already acquired a 2.14% stake in easyJet. The airline's board responded by criticising the timing, citing a temporarily depressed share price due to Middle East tensions affecting customer confidence and jet fuel prices. Before the takeover interest emerged, easyJet shares had fallen by about a fifth since the start of the year.
Shares in easyJet rose as much as 12% in early trading on Monday, reaching 444.7p, well above Castlelake's minimum offer level, before closing up around 10%. The company stated it would 'consider any proposal, should one be made' but highlighted 'considerable regulatory, financial and other execution challenges' associated with a potential takeover.
Under EU rules, European airlines must be majority-owned by regional investors, which could complicate a Castlelake bid. Analysts noted that the regulatory hurdle might require Castlelake to partner with European investors. EasyJet, headquartered in Luton and employing over 16,000 people, is one of Europe's three largest low-cost carriers.
This is not the first time easyJet has attracted takeover interest; in October, reports emerged of a potential bid from Swiss shipping company MSC, and in 2021, it rejected an approach from Wizz Air. Castlelake already has a presence in the airline industry, having provided loans to SAS and Virgin Atlantic.
Susannah Streeter of Wealth Club commented that Castlelake likely believes the market underestimates easyJet's long-term earnings potential. The potential takeover adds to a string of high-profile exits from the London stock market, including Ashtead, Flutter Entertainment, and CRH, highlighting concerns over UK valuations.
