EasyJet says US takeover bid would be ‘highly opportunistic’
Summary
EasyJet said a possible £3 billion takeover bid by the US investment firm Castlelake is “highly opportunistic” because the airline’s share price is low due to current problems in the Middle East. Castlelake owns just over 2% of easyJet and may make a formal offer, but easyJet’s board is confident in their current plan and notes challenges with a takeover.Key Facts
- Castlelake, a US private credit firm, bought a 2.14% stake in easyJet and may offer at least 403p per share, valuing the airline at about £3 billion.
- EasyJet’s share price rose to 444.7p after news of Castlelake’s interest, the highest since early March, valuing the company at about £3.4 billion.
- EasyJet says the timing of the bid takes advantage of a share price lowered by events in the Middle East affecting customer confidence and fuel costs.
- EasyJet will consider any formal offer but notes there are big regulatory, financial, and practical challenges with a takeover.
- EU rules require European airlines to be mostly owned by investors within Europe, potentially complicating a US-led takeover.
- Castlelake already invests in other airlines like Scandinavian SAS and Virgin Atlantic.
- EasyJet is one of Europe’s largest budget airlines, based in Luton and founded by Stelios Haji-Ioannou, who owns about 15% of the company.
- London’s stock market has seen many big companies bought by foreign investors in recent years, reflecting lower UK stock prices compared to other markets.
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