EasyJet rejects fourth Castlelake bid but opens books to extend deadline

EasyJet PLC rejected a fourth takeover approach from Castlelake LP on Thursday, calling the £4.74bn ($6.3bn) bid too low, but agreed to provide limited commercial information after concluding that further due diligence could yield a higher offer.

"The board carefully considered the latest proposal but concluded it continues to fundamentally undervalue EasyJet and its prospects," the company said in a statement. EasyJet also raised "considerable reservations" about the elevated leverage and overall conditionality of Castlelake's proposed structure.

Castlelake's latest offer valued EasyJet at 625 pence per share, a 59 percent premium to the carrier's closing price of 394.20 pence on May 28, before the US firm first disclosed its interest. The stock has traded well below that level since, closing at 531.2 pence on Monday after rising as much as 5.4 percent on news of the approaches, according to exchange data.

The US investment firm, which manages a roughly 2.14 percent stake in EasyJet through its funds, has now made four approaches this month, all rejected. Castlelake has until Friday to either make a firm offer or walk away under UK takeover rules, though the deadline could be extended further if EasyJet's board agrees to engage in formal due diligence.

At stake is control of one of Europe's largest low-cost carriers, with valuable slot holdings at major airports including London Gatwick, Amsterdam Schiphol, and Geneva. EasyJet operates a fleet of more than 300 Airbus A320-family aircraft and carried over 80 million passengers in its last fiscal year. The airline posted a first-half loss in May, reflecting weaker demand and higher fuel costs, but its network assets and brand remain attractive to potential acquirers.

Castlelake has proposed an ownership structure in which the bidding vehicle would be 51 percent owned by European Union nationals and 49 percent by the US firm, a framework it says would comply with EU regulations requiring EasyJet to be majority-owned by EU citizens. EasyJet's board described the structure as "opaque" and said it had "considerable reservations" about whether a deal could be completed under those terms.

The US firm has linked up with industry figures including Mark Breen and former EasyJet chief operating officer Peter Bellew, whose prospective roles in any transaction remain unspecified. Bellew's potential return would mark a notable development given his high-profile departure from the carrier in 2023.

EasyJet shares have been under pressure this year as the Middle East conflict weighed on travel demand and fuel costs rose, creating what the board called a "temporarily depressed" share price that Castlelake was seeking to exploit. The airline's market capitalisation stood at roughly £4.2bn before the bid approaches became public.

The opening of EasyJet's books to Castlelake signals a shift in the board's stance after weeks of resistance, increasing the probability of a negotiated transaction. However, the airline has made clear it will only accept an offer that reflects its medium-term prospects, strong balance sheet, and capital structure — conditions the current proposal does not meet.

If Castlelake fails to secure a deal, EasyJet would remain independent with its strategic options intact, including potential interest from other suitors or a standalone recovery as travel demand normalises. The carrier's next scheduled earnings release is expected in November.

This article is for informational purposes only and does not constitute investment advice.