Budget airline easyJet is facing a potential takeover battle after US investment firm Castlelake publicly revealed a £4.74 billion bid, following the rejection of three separate proposals by the airline’s board.
Castlelake announced that its latest approach, submitted on 20 June, valued easyJet at 625p per share. However, the offer was rejected the following day, prompting the investor to take its proposal directly to shareholders.
The investment firm, which currently holds around 2.14% of easyJet shares through funds under its management, said it had previously made offers of 560p and 600p per share before increasing its valuation.
Explaining its decision to go public, Castlelake said: “As with the second proposal, Castlelake expected that the third proposal would elicit prompt engagement from the easyJet board.”
The company added: “Following the rejection of three proposals by the easyJet board, and given its unwillingness to engage meaningfully, Castlelake is announcing this third proposal to enable easyJet shareholders to consider its merits.”
The move comes just days before the UK‘s Takeover Panel deadline on 26 June, which requires Castlelake to either make a formal offer or withdraw its interest.
Castlelake argues that its latest proposal offers significant value to investors, representing a premium of approximately 59% compared with easyJet’s closing share price of 394.20p before the takeover interest became public.
The airline previously dismissed Castlelake’s advances as “highly opportunistic”, arguing that the approach came during a period of weakness in aviation stocks linked to concerns over the conflict in the Middle East and its impact on global travel markets.
EasyJet also pointed to its strong financial position and long-term growth plans, including its target of generating more than £1 billion in annual pre-tax profits.
The airline further warned that any potential acquisition would face “considerable regulatory, financial and other execution challenges”.
Before news of the takeover interest emerged, easyJet shares had fallen by around 30% over the previous year, reflecting wider pressures across the airline sector.
Castlelake, led by executive chairman Rory O’Neill, manages approximately $36 billion (£27.3 billion) in assets and has significant experience in the aviation industry. The firm previously invested in Scandinavian Airlines (SAS) before later selling its stake to Air France-KLM, and earlier this year explored a potential acquisition of bankrupt US carrier Spirit Airlines.
With shareholders now aware of the latest proposal, attention will turn to whether easyJet’s board maintains its opposition or comes under pressure to reconsider the £4.7 billion offer.