EasyJet's board rejected a £4.74 billion [1] takeover offer from the U.S. investment firm Castlelake on June 22, 2024 [5].
The rejection signals a significant standoff between the budget airline and the investment firm, as Castlelake attempts to take the carrier private despite the board's opposition.
The offer, valued at approximately $6.26 billion [2], represented a bid of 625 pence per share [4]. While some reports rounded the valuation to $6.3 billion [3], the board maintained that the proposal did not meet the necessary criteria for acceptance.
"We consider this proposal opportunistic and not in the best interests of our shareholders," an EasyJet board spokesperson said.
Castlelake has moved to make its plans public after the board's refusal. The firm is now appealing directly to the airline's investors to bypass the board's decision.
"We urge shareholders to consider the offer as we seek to take the budget airline private," a Castlelake representative said.
The bid comes as part of a broader effort by the U.S. firm to consolidate assets in the aviation sector. EasyJet has resisted the move, asserting that the current valuation underestimates the long-term potential of the company.
“"We consider this proposal opportunistic and not in the best interests of our shareholders."”
This confrontation highlights a common tension in corporate governance where an acquiring firm attempts a 'hostile' or public approach after a board rejects a private bid. By going public with the offer, Castlelake is attempting to pressure the board by appealing to shareholders' immediate desire for a premium payout, potentially forcing the airline to either negotiate a higher price or face a shareholder revolt.
