EasyJet: Castlelake Nears £5 Billion Takeover Deal
British airline says its board is prepared to support a revised acquisition proposal after the US investment firm raised its offer.
An EasyJet aircraft as the airline moves closer to a proposed takeover by Castlelake.
EasyJet has reached an agreement in principle with US private equity firm Castlelake after receiving an improved takeover proposal that values the British budget airline at more than £5 billion ($6.7 billion).
The airline’s board said Castlelake’s fifth proposal of £6.90 per share is one it is prepared to recommend to shareholders if the investment firm submits a formal offer by August 3, the deadline set for the transaction.
Castlelake, which manages about $38 billion in assets, had previously made four unsuccessful bids for the airline. EasyJet rejected the earlier offers, describing one of them as “highly opportunistic” after the company’s share price declined and higher fuel costs weighed on its financial performance.
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The revised proposal follows discussions that began in late June, when EasyJet agreed to provide Castlelake with access to commercial information in an effort to facilitate a stronger bid.
In a statement, EasyJet said Castlelake has expressed support for the airline’s long-term growth strategy, including its fleet modernization programme, which the investor believes will strengthen competitiveness, improve efficiency, and support sustainability goals.
Despite the progress, EasyJet cautioned that there is no guarantee a binding offer will be made before the August 3 deadline.
The potential acquisition comes after a challenging period for the airline. In May, EasyJet reported a 27% increase in first-half losses to £377 million, citing higher jet fuel prices and disruption to travel demand linked to conflict in the Middle East. The company also warned that market conditions could remain difficult during the second half of the financial year.
Chief Executive Kenton Jarvis has said the airline remains well positioned to navigate the challenging environment despite ongoing pressure on operating costs.
Castlelake is a major investor in the aviation sector, with significant interests in aircraft leasing and airline investments. Its portfolio includes hundreds of leased aircraft serving international carriers, and it previously acquired a major stake in Scandinavian airline SAS.
