EasyJet is on course to become the latest British corporate name to pass into foreign ownership after its board agreed in principle to support a £5.5 billion takeover by US investment firm Castlelake.
The Luton-based airline said it would be minded to recommend Castlelake’s fifth and improved offer of £6.90 a share, subject to due diligence and a formal bid being made before the August 3 deadline under UK takeover rules.
The announcement sent EasyJet shares more than 10% higher on Monday, bringing to an end months of resistance from the airline, which had repeatedly dismissed earlier approaches as undervaluing the business.
Castlelake has steadily increased its offer from an initial £5.60 a share to the latest proposal, which values EasyJet at £5.23 billion, or £5.5 billion on a fully diluted basis. The private investment firm has also sought to reassure the board by backing the airline’s fleet renewal programme and pledging to use its “best endeavours” to secure regulatory approvals.
The deal would mark another high-profile overseas acquisition of a UK-listed company, adding to concerns over the continued flow of British businesses into foreign ownership amid subdued London market valuations.
EasyJet, founded by Sir Stelios Haji-Ioannou in 1995, has struggled to regain the market value it enjoyed before the pandemic despite a recovery in passenger demand. The airline has been pursuing a strategy centred on expanding its fast-growing holidays business and targeting more than £1 billion in medium-term pre-tax profits.
Sir Stelios, who retains a stake of more than 15%, stands to receive a substantial windfall should the transaction complete.
For Castlelake, which manages around $36 billion in assets, the acquisition would represent one of its most significant investments in European aviation after previous deals involving Scandinavian Airlines and US carrier Spirit Airlines.
If completed, the takeover would underline the growing appeal of undervalued UK-listed companies to overseas buyers—and raise fresh questions over the shrinking pool of British corporate ownership.
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