SouthernWorldwide.com – EasyJet has reached an agreement to be acquired by the American private equity firm Castlelake. The deal values the U.K. budget airline at £5 billion, which is equivalent to $6.7 billion.
The board of directors at EasyJet and Castlelake announced on Sunday that they had come to an agreement in principle. This follows previous rejections of four earlier bids made by Castlelake for the airline.
Following the announcement, EasyJet shares saw a significant increase, jumping by nearly 10% on Monday morning on the London Stock Exchange. This positive market reaction indicates investor confidence in the proposed acquisition.
EasyJet’s board stated that they are “minded to recommend” Castlelake’s offer of £6.90 per share to their shareholders. For the deal to proceed, Castlelake is required to submit a formal takeover bid by August 3rd. Alternatively, they must withdraw their offer.
In a statement released by the airline, Castlelake expressed profound respect for EasyJet and its employees. The firm indicated its intention to support the airline’s future growth and its transformation into a stronger, more resilient European carrier.
Castlelake also voiced its support for EasyJet’s ongoing fleet modernization program. The private equity firm views this modernization as crucial for the company’s long-term competitiveness, operational efficiency, and sustainability goals.
EasyJet, established in 1995 by entrepreneur Stelios Haji-Ioannou, rapidly expanded by offering no-frills, low-cost flights across Europe. Its primary U.K. hub is located at London Gatwick Airport.
However, the airline has recently encountered significant challenges. These include escalating jet fuel costs, which have been exacerbated by the Iran war. These rising costs have put considerable pressure on airline profits.
Castlelake, headquartered in Minneapolis, manages a substantial portfolio with approximately $37 billion in assets under its management. The firm leases its fleet of 375 aircraft to a diverse range of airlines globally.
