US firm goes public with £4.7bn proposal to buy easyJet after earlier bids rejected

Castlelake escalates easyJet approach

US investment firm Castlelake has publicly disclosed a third all-cash proposal to buy easyJet, valuing the airline at about £4.7bn and offering 625p a share.

easyJet said the board had already rejected the latest proposal, extending a run of rebuffs that included earlier bids at 560p and 600p a share. The airline said the offer still fundamentally undervalues the business.

Castlelake said it went public after repeated rejections and what it described as limited engagement from the board. The firm has until 5pm on 26 June to say whether it intends to make a formal offer under takeover rules.

Bid chronology

The current approach is the latest step in a process that began earlier this month, when Castlelake’s interest in easyJet was first reported before any firm offer had been disclosed.

According to the reporting, the US firm then put forward an initial proposal at 560p a share, followed by a second at 600p and then the latest 625p cash offer. Each of those approaches was rejected by easyJet’s board.

The latest public disclosure marks an escalation because Castlelake is now urging investors to consider the proposal after the board would not engage on terms the firm believes are deliverable.

Why easyJet rejected it

easyJet said Castlelake’s valuation relied on temporarily depressed and conflict-affected share prices, together with short-term earnings assumptions.

The airline also raised concerns about the proposed structure of the transaction. It said the ownership plan was opaque and questioned the leverage and conditionality attached to the approach.

The board has not agreed to enter a deal, and the bid remains unsolicited, rejected and unresolved.

Ownership and regulation

Any purchase of a major European airline has to navigate EU ownership rules, which require carriers to remain majority-owned by EU nationals.

easyJet said that made the structure of Castlelake’s proposal particularly important. Castlelake said it has partnered with Peter Bellew and Mark Breen as part of its effort to address those rules.

Coverage has described that as a possible workaround, but the structure remains one of the main points of dispute between the two sides.

What happens next

The immediate question is whether Castlelake will turn the proposal into a formal offer before the 26 June deadline.

Investors will also be watching for any response from major shareholders and for any change in stance from easyJet’s board.

For now, the airline has rejected all three approaches, while Castlelake has made clear it believes the offer is compelling and deliverable. The next decision point comes before the deadline set under takeover rules.