BY EMMANUEL OGBONNA
U.S.-based investment firm Castlelake has publicly unveiled its £4.74 billion ($6.26 billion) takeover proposal for British low-cost airline easyJet after the carrier’s board rejected three separate offers, escalating the battle over one of Europe’s largest budget airlines.
Castlelake announced on Monday that it was making the details of its latest proposal public to allow easyJet shareholders to evaluate the offer directly and express their views before the June 26 deadline for submitting a formal takeover bid.
The Minneapolis-based investment firm said it decided to disclose its proposal after repeated attempts to engage with easyJet’s board failed to produce meaningful discussions. According to Castlelake, the airline’s directors rejected all three previous approaches without entering substantive negotiations over the potential acquisition.
In a statement, Castlelake said it believed shareholders deserved the opportunity to consider the proposal independently, particularly given what it described as the board’s unwillingness to engage constructively with the firm.
The latest proposal values easyJet at approximately £4.74 billion and offers shareholders £6.25 for each share they own. The bid represents a premium of roughly 57% compared with easyJet’s closing share price of £3.94 on May 29, the day before Castlelake first revealed its interest in acquiring the airline.
The current offer is also higher than the firm’s previous proposals, which valued the airline at £5.60 and £6.00 per share, respectively. Castlelake did not indicate whether it intends to submit another improved offer if the current proposal is rejected.
EasyJet had not issued an immediate public response following Castlelake’s latest announcement.
Castlelake is one of the world’s largest private investment firms with significant experience in the aviation sector. The company manages approximately $38 billion in assets and has invested more than $24 billion in aviation-related businesses since 2005. Its portfolio includes investments across aircraft leasing, airlines and other transportation infrastructure, giving it extensive experience in the global aviation industry.
To address European Union ownership regulations governing airlines, Castlelake has structured its proposal with the support of prominent aviation executives.
European aviation rules require airlines operating within the European Union to remain majority owned and effectively controlled by EU nationals. To comply with those regulations, Castlelake has partnered with former Malaysia Airlines Chief Executive Peter Bellew and aviation executive Mark Breen, both of whom have held senior leadership roles at major airlines.
The investment firm said the proposed ownership structure follows models already adopted by other European airlines and has been designed to satisfy regulatory requirements while preserving easyJet’s eligibility to operate throughout Europe.
Beyond the cash offer, Castlelake is also proposing an alternative option for shareholders who wish to retain an interest in the airline’s future.
Under the plan, eligible investors would have the opportunity to exchange part of their holdings for equity in a privately owned version of easyJet following the acquisition. This structure would allow participating shareholders to remain invested alongside Castlelake after the company is taken private, although participation would be subject to a maximum allocation limit.
Such an arrangement could appeal to long-term investors who believe easyJet has additional growth potential but are also interested in receiving value through the takeover.
The proposed acquisition comes at a time when Europe’s aviation industry continues to experience strong passenger demand despite persistent challenges including higher operating costs, aircraft delivery delays and ongoing geopolitical uncertainty affecting some travel markets.
EasyJet remains one of Europe’s leading low-cost carriers, operating an extensive network of short-haul routes across the continent and serving millions of passengers each year. The airline has continued rebuilding its operations following the disruption caused by the COVID-19 pandemic while navigating rising fuel costs, inflationary pressures and increasing competition among European carriers.
If Castlelake succeeds in acquiring the company, the transaction would rank among the largest private equity deals in the European aviation sector in recent years and could reshape ownership of one of Britain’s best-known airlines.
Attention will now turn to easyJet’s shareholders and the approaching June 26 deadline, when Castlelake must decide whether to submit a formal takeover offer. Investors will also be watching closely to see whether easyJet’s board changes its position, whether Castlelake improves its proposal further, or whether competing bidders emerge for the airline.
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