easyJet (LON: EZJ) has rejected an improved takeover proposal from US private equity firm Castlelake, although the airline has agreed to provide limited access to commercial information in the hope of securing a higher offer.
The latest proposal values easyJet at £6.50 per share in cash, together with an alternative allowing shareholders to exchange part of their holdings for unlisted, non-transferable equity in the acquiring vehicle. The consortium would be led by Castlelake, alongside Brookfield Asset Management and a group of European aviation investors.
Despite the improved terms, easyJet’s board unanimously concluded that the proposal continues to substantially undervalue the airline and raised ongoing concerns over the complexity and deliverability of the transaction.
However, directors believe that granting Castlelake limited due diligence access could result in a revised proposal that more accurately reflects the company’s long-term value. The board has also requested stronger assurances regarding the ownership structure and the likelihood of completing any transaction.
To facilitate further discussions, the UK Takeover Panel has agreed to extend the “put up or shut up” deadline by nine days. Castlelake must now either announce a firm intention to make an offer or walk away by 5:00pm on 5 July 2026.
easyJet said it remains in a strong financial position, supported by an investment-grade balance sheet, a net cash position, high customer satisfaction and strong employee engagement. The company also reaffirmed its medium-term ambition of generating more than £1 billion in annual pre-tax profit.
While negotiations continue, the airline stressed there is no certainty that a formal offer will ultimately be made or what terms any future bid may contain. Shareholders have been advised to take no action while discussions remain ongoing.
