Key facts
- EasyJet rejected a fourth takeover bid from Castlelake at £6.50 per share.
- The airline stated the offer "substantially undervalues the company and its prospects."
- EasyJet expressed concerns about the ownership structure and deliverability of Castlelake's proposed deal.
- The company will provide commercial information to Castlelake to help it produce a more attractive proposal.
- Previous bids of £5.60, £6, and £6.25 per share were also rejected.
EasyJet has opened talks with Castlelake after rejecting a fourth takeover offer worth £4.9bn from the US investment firm. The British budget carrier unanimously rejected the latest proposal of 650p a share, stating it still "substantially" undervalued the company and raised "significant questions of deliverability" regarding ownership structure and timing.
Despite the rejection, EasyJet's board indicated a willingness to engage further, suggesting that giving Castlelake access to limited commercial information might produce a more attractive proposal. Castlelake, which has $38bn in assets under management and already owns a small stake in EasyJet, has added Brookfield Asset Management to its bidding vehicle. To comply with EU rules requiring majority EU ownership for operating licenses, the bidding vehicle would be 51% owned by EU nationals Peter Bellew and Mark Breen, with Castlelake and co-investors holding 49%.
Castlelake has until 5pm on July 5 to improve its offer or walk away. The airline's share price rose 6% on Thursday morning to 575p. Analysts suggest investors expect a sweetened deal, contributing to the stock's strength.