EasyJet’s board has recommended shareholders accept a takeover offer from Castlelake, a US-based private equity firm, valuing the airline at £5.5bn. The agreed price of £6.90 per share represents a significant increase from four previous bids that ranged as low as £5.60 per share. The airline’s share price rose nearly 10% following the announcement. Under City takeover rules, Castlelake is required to submit a formal bid by early August.
Castlelake signalled its intention to maintain easyJet’s current operational strategy and indicated it would not pursue a break-up of the company. In joint statements, the firm emphasized support for easyJet’s fleet modernization program, which it described as essential to the airline’s long-term competitiveness and sustainability. The offer structure also allows current shareholders to retain their investment under the new ownership rather than being forced to exit when the company delists from public markets.
EasyJet’s founder and largest shareholder, Stelios Haji-Ioannou, who holds approximately 15% of the company along with his family, has not yet publicly commented on the bid. The airline operates from London Luton and Gatwick airports, employs 19,000 people, and carries approximately 93 million passengers annually.
Financial analysts offered differing perspectives on the deal’s implications. Several commentators raised concerns that the transaction reflects a broader pattern of foreign buyers acquiring undervalued British firms, with some describing it as symbolic of the UK stock market’s underperformance. However, analysts at Barclays contended that the bid price offered fair value to shareholders while presenting Castlelake with an opportunity to capitalize on market undervaluation of companies requiring substantial capital investment. EasyJet’s share price had declined approximately 30% during the year before takeover interest emerged.
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