EasyJet agrees to Castlelake's £5.5 billion takeover bid at £6.90 a share

Castlelake's fifth takeover proposal values EasyJet at £5.5 billion, with the UK budget carrier's board signaling it would recommend the £6.90-a-share offer to shareholders.

"The board has concluded that the financial terms of this proposal are at a value it would be minded to recommend," EasyJet said in a statement Sunday, adding that Castlelake has until Aug. 3 to make a firm offer.

The 73% premium to EasyJet's closing price on May 29 — before Castlelake first disclosed its interest — marks a significant escalation from the four earlier bids the carrier rejected, which ranged from £5.60 to £6.50 a share. EasyJet shares closed Friday at £5.58, having fallen more than 30% in the past year amid surging fuel costs tied to the Iran conflict.

The deal would take the 31-year-old airline private, removing one of Europe's largest low-cost carriers from public markets. Castlelake, which manages $36 billion in assets, would own 49% of the bidding vehicle, with the remainder held by two EU nationals — former EasyJet Chief Operating Officer Peter Bellew and industry executive Mark Breen — to comply with European Union rules requiring airlines to be majority-owned by EU citizens.

The Long Pursuit

Castlelake, a major aircraft lender that has leased planes to about 200 airlines, first approached EasyJet in late May. The Luton-based carrier initially dismissed the overtures as "highly opportunistic," arguing that the Iran conflict had temporarily depressed its share price. EasyJet's stock had lost more than 30% of its value over the prior 12 months before the bid emerged.

The U.S. investment firm gradually increased its offer from an initial £5.60 per share, through £6 and £6.25, before landing at £6.50 and finally £6.90. EasyJet granted Castlelake limited access to its commercial data after rejecting the fourth proposal in June, signaling willingness to negotiate.

Regulatory Hurdles

The biggest obstacle to completion remains European Union ownership rules. EU regulations require airlines operating in the bloc to be majority-owned and controlled by EU nationals. Castlelake has structured its bidding vehicle to address this: the U.S. firm would hold 49%, with the remaining 51% split between Bellew — who served as EasyJet's chief operating officer from 2019 to 2022 — and Breen, a senior industry executive.

EasyJet operates 355 aircraft across more than 1,200 routes in 38 European countries and employs more than 19,000 people. Its package holidays business and fuel-efficient Airbus fleet have been bright spots during a period when the broader airline industry has struggled with elevated fuel costs and margin pressure.

Founder Stelios Haji-Ioannou, who started EasyJet in 1995 and remains the largest shareholder with about a 15% stake alongside his family, has a history of public clashes with management over growth strategy. His position on the latest bid has not been disclosed.

The British market is on course for a record year of mergers and acquisitions in 2026, as weaker valuations among London-listed companies attract foreign buyers. If completed, the EasyJet takeover would be one of the largest private equity acquisitions of a European airline in recent years.

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