Key Takeaways
- The board of EasyJet unanimously dismissed Castlelake’s latest acquisition proposal valued at £6.25 per share, labeling it “highly opportunistic”
- Shares of EZJ surged more than 5% during early morning trades, reaching £5.30—the highest level seen in almost twelve months
- The Minneapolis-based investment firm has taken its £4.74 billion offer public in an attempt to influence the board before the June 26 cutoff
- Castlelake’s proposal represents approximately a 59% premium over EasyJet’s trading price prior to the disclosure of its acquisition interest
- Directors expressed significant concerns regarding the proposed financing leverage, unclear ownership framework, and insufficient recognition of the carrier’s future potential
The board of directors at EasyJet has turned down a third acquisition proposal from Castlelake, a United States-based investment firm, which valued the low-cost carrier at £6.25 per share—totaling approximately £4.74 billion ($6.26 billion).
Shares of EZJ jumped over 5% during early Monday session trading, touching £5.30—marking the stock’s peak in close to a year.
The aviation-focused investor based in Minneapolis, which oversees approximately $38 billion in total assets under management, presented three consecutive offers: £5.60 on June 16, followed by £6.00 shortly thereafter, and finally £6.25 on June 20. Directors rejected each proposal.
The most recent proposal includes a premium of roughly 59% compared to EasyJet’s closing share price of 394 pence recorded on May 28—just before Castlelake publicly revealed its acquisition intentions.
According to EasyJet’s board, the offers “fail to reflect easyJet’s medium-term prospects, its strong balance sheet and capital structure.” The directors additionally raised “considerable reservations” regarding the debt financing levels proposed and characterized the ownership framework as “opaque.”
The airline highlighted a 46% jump in pre-tax profits across the two complete fiscal years ending September 2025 and emphasized its objective of exceeding £1 billion in profit before tax.
Investment Firm Takes Offer Public to Apply Shareholder Pressure
Castlelake opted to publicly announce the acquisition bid, stating that EasyJet’s “unwillingness to engage meaningfully” provided no alternative course of action. The firm indicated that publicizing the proposal would enable shareholders to evaluate its value ahead of the June 26 deadline mandated by UK Takeover Code regulations.
Dudley Shanley, an analyst with Goodbody Stockbrokers, observed that “increased pressure on the board this week” is anticipated.
Castlelake has confirmed the bid comes with complete funding arranged through both equity capital and debt financing, with Goldman Sachs expressing its ability to provide the necessary financial backing.
European Union Ownership Regulations Create Additional Hurdles
To navigate European aviation ownership regulations—which mandate that EU air carriers maintain majority ownership and operational control by EU citizens—Castlelake has partnered with Peter Bellew, the former Chief Operating Officer of both Malaysia Airlines and Ryanair, alongside Mark Breen, as EU-national stakeholders.
The suggested framework incorporates a partial option allowing EasyJet shareholders to choose unlisted, non-transferable, non-voting equity in an entity with 49% Castlelake ownership and 51% ownership by European Union nationals.
EasyJet strongly criticized this configuration, describing the framework as “opaque.” Shanley similarly pointed out that investors might feel let down by the lack of an established European airline partner participating in the transaction.
Castlelake maintains its ownership model is consistent with frameworks employed by other European air carriers to satisfy regulatory compliance requirements.
According to UK Takeover Code regulations, Castlelake must either submit a definitive offer or withdraw completely by 5 p.m. on June 26.
EasyJet stated it “remains highly confident” in its current strategic direction and continues prioritizing its medium-term objectives, which include expanding its holiday package business.
