EasyJet Agrees £5.5bn Takeover by Castlelake

EasyJet has agreed in principle to a £5.5 billion ($7.34 billion) takeover proposal from U.S. investment firm Castlelake, according to multiple reports. The agreement, announced on Sunday, values easyJet at £6.90 per share and marks the culmination of lengthy negotiations between the two parties.

The latest bid represents a nearly 24% premium to EasyJet's share price as of Friday's close. Castlelake has until August 3 to formalize its offer or walk away under British takeover rules. In response, EasyJet shares surged by approximately 10% on Monday following the announcement.

The potential take-private deal comes at a challenging time for airlines, which are grappling with sharply higher fuel prices and margin pressure linked to the Iran conflict. EasyJet had previously rejected four proposals from Castlelake, calling them opportunistic attempts to buy the airline 'on the cheap' and raising concerns over governance structure.

According to The Guardian, analysts have expressed mixed views on the deal. Some believe it shows UK firms are being bought at undervalued prices, while others argue that the bid offers good value to shareholders. EasyJet's board of directors said it was 'minded to recommend' Castlelake's £6.90-per-share offer to shareholders. The airline also stated that Castlelake has emphasized its respect for EasyJet and its people, along with its intention to support the company's future growth and transformation into a stronger, more resilient European airline.

EasyJet was founded in 1995 by entrepreneur Stelios Haji-Ioannou. The carrier has faced recent challenges, including soaring jet fuel costs stemming from the Iran war, that have cut into airline profits. Castlelake manages roughly $37 billion in assets and leases its fleet of 375 planes to hundreds of global airlines.