Key Highlights
- EasyJet’s leadership dismissed Castlelake’s third acquisition proposal worth £6.25 per share, labeling it “highly opportunistic”
- Shares of EZJ surged more than 5% during morning trading, reaching £5.30—the highest level seen in almost twelve months
- Castlelake has taken its £4.74 billion offer public in an effort to apply pressure on directors before the June 26 cut-off date
- The proposed £6.25-per-share valuation represents approximately a 59% premium over EasyJet’s trading price prior to Castlelake’s disclosure
- Directors expressed apprehensions regarding excessive leverage, unclear ownership arrangements, and inadequate valuation of the carrier’s future potential
The leadership team at EasyJet has turned down a third acquisition attempt from Minneapolis-based investment company Castlelake, which placed a value of £6.25 per share on the low-cost carrier—translating to approximately £4.74 billion ($6.26 billion).
Shares of EZJ jumped over 5% during early Monday session, touching £5.30—marking the stock’s strongest performance in close to a year.
Castlelake, an aviation-focused investment firm overseeing roughly $38 billion in assets, put forward three consecutive offers—£5.60 on June 16, £6.00 shortly thereafter, and £6.25 on June 20. The board turned down each proposal.
The most recent bid includes a premium of about 59% compared to EasyJet’s trading price of 394 pence on May 28, the day before Castlelake publicly revealed its acquisition interest.
EasyJet’s directors stated the offers “fail to reflect easyJet’s medium-term prospects, its strong balance sheet and capital structure.” Leadership also expressed “considerable reservations” regarding the debt levels proposed and characterized the ownership arrangements as “opaque.”
The airline highlighted a 46% surge in pre-tax earnings across the two complete fiscal years ending September 2025 and emphasized its goal of achieving over £1 billion in pre-tax profit.
Castlelake Takes Public Route to Apply Pressure
Castlelake opted to make its proposal public, stating EasyJet’s “unwillingness to engage meaningfully” provided no alternative. The investment firm explained that publicizing the offer would enable shareholders to evaluate its value proposition ahead of the June 26 deadline mandated by UK Takeover Code.
Goodbody Stockbrokers analyst Dudley Shanley observed there will be “increased pressure on the board this week.”
Castlelake confirmed the acquisition is fully financed through a combination of equity and debt arrangements, with Goldman Sachs signaling its capacity to provide the necessary capital.
European Aviation Ownership Regulations Create Challenges
To navigate European Union aviation ownership regulations—which mandate that EU-based carriers remain majority-owned and controlled by EU citizens—Castlelake has partnered with former Malaysia Airlines and Ryanair COO Peter Bellew, alongside Mark Breen, as EU-national participants.
The suggested framework includes a partial option allowing EasyJet shareholders to choose unlisted, non-transferable, non-voting securities in an entity 49% controlled by Castlelake and 51% by EU nationals.
EasyJet strongly criticized this configuration, describing the structure as “opaque.” Shanley additionally observed that investors might be dissatisfied by the lack of a well-known European airline operator as a partner in the transaction.
Castlelake contended its ownership framework mirrors arrangements employed by other European airlines for regulatory adherence.
Per UK Takeover Code regulations, Castlelake must either formally announce a definitive offer or withdraw by 5 p.m. on June 26.
EasyJet indicated it “remains highly confident” in its current strategy and continues concentrating on its medium-term objectives, which include expanding its holiday packages division.
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