easyJet Takeover Battle
Castlelake Publicly Outlines Third 4.74 Billion easyJet Takeover Bid, Setting June 26 Deadline
Anonymous
Key Points
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Castlelake’s three rejected proposals were each tied to specific dates and offer prices: a 560p cash offer on 12 June (rejected 16 June), a 600p cash offer on 17 June (rejected 20 June), and the 625p cash “Third Proposal” on 20 June (rejected 21 June). Castlelake said the Third Proposal was published to let shareholders consider the bid and “provide their views.”
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In its April update, easyJet forecast a pre-tax loss of £540m to £560m, attributing deterioration to “the conflict in the Middle East and the competitive environment,” while also noting “fears of a jet fuel shortage.” CEO Kenton Jarvis also said that after its “busiest Easter holiday period ever,” the “operational ramp up into peak summer continues as planned.”
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Castlelake argued its 625p-per-share price was not just a premium to current trading, but also historically and analytically significant: it said the proposed price was above any easyJet closing share price since February 2022 and exceeded all analyst price targets published since easyJet’s April interim update.
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Under UK takeover rules, Castlelake’s publication was explicitly positioned as a non-firm step: the filing states it falls under “RULE 2.4” (not a Rule 2.7 firm intention to make an offer), and cautions there is “no certainty that a firm offer will be made.” Separately, Castlelake said it has until 5pm on 26 June to announce a firm intention or “walk away.”
US private equity firm Castlelake has gone public with a 625 pence-per-share takeover bid for easyJet, valuing the budget airline at roughly £4.74 billion ($6.26 billion), after the airline's board rejected three separate approaches in just ten days. Ask Traders reported the move came after easyJet turned down offers of 560p and 600p within the same week, forcing Castlelake to appeal directly to shareholders.
EasyJet called the latest bid "highly opportunistic," saying Castlelake was trying to buy the airline "on the cheap" while its share price was temporarily depressed. Castlelake has until 5pm BST on June 26 to either announce a firm intention to make an offer or walk away for at least six months, according to Yahoo Finance UK.
Three Bids in Ten Days, Three Rejections
Castlelake made its first move on June 12 with a 560p-per-share cash offer. EasyJet rejected it on June 16. Castlelake came back on June 17 with 600p per share. That was rejected on June 20. Hours later, Castlelake submitted a third offer at 625p. The board turned that down the very next day, according to Border Telegraph.
Castlelake then published the Third Proposal publicly. The firm said it did so to let shareholders "consider the bid and provide their views." Under UK takeover rules, this is a Rule 2.4 disclosure — an expression of interest, not a legally binding offer. There is, as Castlelake itself acknowledged, "no certainty that a firm offer will be made."
Why Castlelake Says 625p Is a Fair Price
Castlelake argues the 625p offer is generous by almost any measure. The price is above every easyJet closing share price since February 2022. It also exceeds every analyst price target published since easyJet's April interim update, where most targets clustered around 550p to 580p, according to Market Screener.
The firm says the bid represents a mid-to-high 50% premium over the period when its interest first became public. Castlelake is also offering shareholders the option to take partial equity rather than full cash, so they can stay invested in easyJet as a privately held company. Aviation analysts called this a "clever tactic" to win over institutional investors who still believe in the low-cost carrier model.
EasyJet Points to Tough Conditions But a Strong Summer Ahead
EasyJet's board says the share price does not reflect the airline's real value. In its April update, the airline forecast a pre-tax loss of £540 million to £560 million, blaming "the conflict in the Middle East and the competitive environment" as well as "fears of a jet fuel shortage," according to TTG Media.
But CEO Kenton Jarvis struck an upbeat tone on operations. He said easyJet had just seen its "busiest Easter holiday period ever" and that the "operational ramp-up into peak summer continues as planned." The board argues Castlelake is exploiting a short-term dip to grab the airline before its summer revenues recover.
European Ownership Rules Add a Major Regulatory Hurdle
EU law requires that airlines operating in Europe be majority-owned and controlled by EU or EEA nationals. Castlelake, as a US firm, cannot simply buy easyJet outright. To get around this, Castlelake says it would use "partnered executives" — unnamed European nationals — to hold voting control, according to Yahoo Finance UK.
This structure will face close scrutiny from UK and EU regulators. If authorities decide the arrangement is a workaround rather than genuine European control, easyJet could lose its Air Operator Certificate in the EU — a potentially fatal blow to its network. Trade unions including BALPA and Unite are also expected to push back hard against any private equity takeover, fearing job cuts and pension changes.
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