Key Takeaways
- EasyJet’s board turned down Castlelake’s latest £6.25-per-share acquisition attempt, describing it as “highly opportunistic”
- Shares of EZJ surged more than 5% during early market activity, reaching £5.30 — the highest level in almost 12 months
- Castlelake has disclosed its £4.74 billion proposal publicly to increase shareholder pressure with a June 26 deadline approaching
- The £6.25 proposal reflects approximately a 59% premium compared to EasyJet’s share value before Castlelake’s interest became known
- Directors expressed concerns about excessive leverage, unclear ownership arrangements, and inadequate valuation of the carrier’s future potential
The board of directors at EasyJet has turned down a third acquisition attempt from Castlelake, a U.S.-based investment company, which valued the low-cost carrier at £6.25 per share, totaling approximately £4.74 billion ($6.26 billion).
Shares of EZJ climbed over 5% during Monday morning trading sessions, reaching £5.30 — marking the stock’s strongest performance in close to a year.
The Minneapolis-headquartered aviation investment firm, which oversees roughly $38 billion in assets, presented three consecutive offers — beginning with £5.60 on June 16, followed by £6.00, and culminating with £6.25 on June 20. Directors rejected each proposal.
The most recent proposal represents roughly a 59% premium above EasyJet’s trading price of 394 pence recorded on May 28, prior to Castlelake publicly announcing its intentions.
The airline’s board stated the offers “fail to reflect easyJet’s medium-term prospects, its strong balance sheet and capital structure.” Directors also raised “considerable reservations” regarding the financing structure’s debt levels and characterized the ownership arrangements as “opaque.”
The carrier highlighted a 46% expansion in pre-tax earnings across the two complete fiscal years ending September 2025 and announced its objective of exceeding £1 billion in profit before tax.
Investment Firm Takes Public Approach to Apply Pressure
Castlelake opted to disclose its offer publicly, citing [[LINK_START_2]]easyJet’s[[LINK_END_2]] “unwillingness to engage meaningfully” as leaving no alternative. The investment firm stated that public disclosure would enable shareholders to evaluate the proposal’s value ahead of the June 26 regulatory deadline established under UK Takeover Code.
Goodbody Stockbrokers analyst Dudley Shanley observed that “increased pressure on the board this week” is anticipated.
Castlelake confirmed the acquisition would be financed through a combination of equity capital and borrowed funds, with Goldman Sachs providing confirmation of available financing arrangements.
European Union Aviation Regulations Present Challenges
To navigate European aviation ownership regulations — which mandate EU air carriers maintain majority ownership and control by EU citizens — Castlelake has partnered with Peter Bellew, former Chief Operating Officer at Malaysia Airlines and Ryanair, alongside Mark Breen, both EU nationals.
The proposed arrangement offers EasyJet shareholders a partial option to receive unlisted, non-transferable, non-voting equity interests in an entity with 49% Castlelake ownership and 51% EU national ownership.
EasyJet strongly criticized this framework, labeling the structure “opaque.” Shanley additionally observed that investors might feel disappointed by the lack of a well-established European airline partner participating in the transaction.
Castlelake defended its ownership framework, asserting it resembles structures employed by other European airlines to satisfy regulatory requirements.
According to UK Takeover Code provisions, Castlelake must either submit a definitive offer or withdraw completely by 5 p.m. on June 26.
EasyJet indicated it “remains highly confident” in its strategic direction and continues prioritizing its medium-term objectives, which include expanding its holiday packages division.
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