EasyJet has described a potential £3bn takeover bid from US investment group Castlelake as 'highly opportunistic', as shares in the airline surged to their highest level in three months. The US private credit firm announced on Friday it was considering an offer, valuing the airline at a minimum of 403p per share, or roughly £3bn overall. Castlelake also disclosed it had already acquired a 2.14% stake in the business.
EasyJet hit back at the timing of the approach, stating that its share price was 'temporarily depressed due to the current situation in the Middle East and its impact on customer confidence and jet fuel prices'. Before the takeover interest emerged, shares had lost about a fifth of their value since the start of the year. However, the company expressed confidence in its strategy, citing its cash position and profit outlook.
Shares in easyJet jumped as much as 12% in early trading on Monday, reaching 444.7p—above Castlelake's minimum offer level—and closed up about 10%. Under City takeover rules, Castlelake has until 5pm on 26 June to announce whether it intends to make a formal offer. EasyJet said it would 'consider any proposal, should one be made' but noted 'considerable regulatory, financial and other execution challenges'.
EU rules require European airlines to be majority-owned by investors within the region, which RBC Capital Markets analyst Ruairi Cullinane said 'could, at the very least, complicate a takeover of easyJet by Castlelake, if acting alone'. This is not the first time easyJet has attracted interest; in October, reports emerged of a potential bid from Swiss shipping company MSC, and in 2021, it rejected an approach from rival Wizz Air.
EasyJet, headquartered in Luton with over 16,000 employees, is one of Europe's three largest low-cost airlines, behind Ryanair. Founder Stelios Haji-Ioannou remains the biggest shareholder with a 15% stake but declined to comment. Castlelake, which manages $36bn in assets, already has a strong presence in the airline industry, having provided loans to SAS and Virgin Atlantic.
Susannah Streeter of Wealth Club said Castlelake 'clearly believes the market may be underestimating easyJet's longer-term earnings potential'. A takeover would mark another high-profile exit from London's struggling stock market, following companies like Ashtead, Flutter Entertainment, and CRH. Streeter added that this is 'fresh evidence that the British markets are increasingly becoming a hunting ground for sophisticated institutional investors'.
