EasyJet passenger aircraft on the tarmac at London Southend Airport in Southend-on-Sea, U.K., on May 3, 2024.<\/p>\n
Bloomberg | Getty Images<\/p>\n
British budget airline easyJet has agreed in principle \u200bto a sweetened takeover bid \u200bfrom U.S. investment firm Castlelake \u200bthat values the carrier at up to \u00a35.5 billion ($7.34 billion), it said on Sunday, a potential shakeup for Europe’s aviation sector.<\/p>\n
The new offer at \u00a36.90 a share represents a 73% premium to easyJet’s closing price on May 29, when the private equity \u2060fund manager \u200cdisclosed its interest in the airline to British regulators, driving the \u2060shares up steeply since then.<\/p>\n
The deal, which would see the U.S. investor take easyJet, a 31-year-old airline, private, coincides with operating challenges for airlines globally as they grapple with sharply higher fuel prices and profit pressure due to the Iran conflict.<\/p>\n
Locked in fierce competition with rival Ryanair, easyJet \u200chad long been viewed as a takeover target with its valuable landing slots at airports including London Gatwick, Paris and Geneva attractive to potential bidders. In June, EasyJet rejected a \u00a34.93 billion proposal from Castlelake but signaled its interest in continuing talks by granting the private equity manager limited access to the airline’s commercial data.<\/p>\n
On Sunday, easyJet’s board said that the latest bid was at “a value that the Board would be minded to recommend to easyJet shareholders,” though it added that Castlelake now needed to submit \u2060its firm intention to make an offer by Aug. 3.<\/p>\n
Castlelake, which is a major lender to airlines and has leased airplanes to \u200cabout 200 airlines, declined to comment beyond its joint announcement of the deal \u200cwith easyJet, citing regulatory restrictions.<\/p>\n