EasyJet (LON: EZJ) has rejected a third takeover approach from private equity firm Castlelake, setting the stage for a potential showdown with shareholders as the bidder considers its next move ahead of this week’s takeover deadline.
Castlelake revealed that its latest non-binding proposal of 625p per share in cash was rejected by the airline’s board on Sunday, following earlier rejected offers of 560p and 600p per share.
The latest proposal values easyJet at a 59% premium to its share price before Castlelake’s interest became public and exceeds the airline’s highest closing price since early 2022. Castlelake also noted that its offer sits above all published analyst price targets issued since easyJet’s April trading update.
Frustrated by what it described as an “unwillingness to engage” from the board, Castlelake has now taken its proposal directly to shareholders, arguing that investors should have the opportunity to consider the offer and express their views.
In an attempt to make the proposal more attractive, Castlelake said it would offer a partial equity alternative, allowing existing shareholders to retain an interest in easyJet as a privately owned company following any acquisition.
To address European airline ownership regulations, Castlelake has partnered with aviation executives Peter Bellew and Mark Breen. Under the proposed structure, an EU-controlled vehicle would hold a controlling stake in the acquisition vehicle, ensuring compliance with ownership requirements.
Bellew is a former easyJet executive who later served as chief executive of Malaysia Airlines and chief operating officer of Ryanair, while Breen has extensive experience in aviation investment and advisory roles.
Under UK takeover rules, Castlelake has until 5pm on 26 June to either announce a firm intention to make an offer or walk away. While the bidder remains committed to pursuing the opportunity, it cautioned that there can be no certainty that a formal takeover bid will ultimately be made.
