easyJet, one of Europe’s leading low-cost airlines, may soon become a private entity as an American investment fund has raised its takeover offer significantly. The airline’s management has indicated a willingness to accept the proposal for the first time, as reported by Reuters.
The latest bid stands at £6.90 per share, valuing the company at approximately £5.5 billion ($7.34 billion), which reflects a 73% premium over the share price from May 29, when Castlelake first expressed its interest in acquiring the airline.
Earlier in June, easyJet rejected a prior offer from the fund valued at £4.93 billion, deeming it insufficient. However, the airline agreed to share certain commercial data with the investor, paving the way for further negotiations. The management has now stated it is prepared to recommend that shareholders accept the new offer, provided Castlelake submits a formal application by August 3, according to Reuters.
Challenges Ahead Due to EU Regulations
However, the completion of the transaction will require compliance with European Union regulations concerning airline ownership. Under these rules, carriers operating in the EU must remain under majority control of EU citizens. Castlelake has previously indicated it would retain 49% of the shares in the entity acquiring easyJet, while the remaining 51% would be held by two EU managers: former Malaysia Airlines CEO and ex-easyJet COO Peter Bellew, alongside aviation manager Mark Breen.
easyJet has long been viewed as an attractive takeover target due to its valuable airport slots at key locations including London Gatwick, Paris, and Geneva, along with a network of over 1,200 routes serviced by a fleet of 355 aircraft. The airline is still grappling with the impact of the COVID-19 pandemic, and in recent months has faced additional challenges from rising fuel prices and profitability pressures linked to the Middle East conflict. Nonetheless, the growing holiday segment and a modern fleet of Airbus aircraft remain some of the company’s strongest assets, as highlighted by Reuters.
