EasyJet Stock Jumps 10% After Castlelake Agrees £5.5B Takeover

TLDR

• EasyJet stock surged 10.5% on Monday, hitting a new 52-week high
• Castlelake agreed in principle to a £5.5 billion ($7.3 billion) takeover at 690p per share
• This is Castlelake’s fifth bid for EasyJet, up from an opening offer of 560p in May
• EasyJet has until August 3 to receive a firm offer or Castlelake must walk away
• Analysts at Bernstein suggest Castlelake may plan to break up the airline and sell its assets

EasyJet shares jumped over 10% on Monday morning in London trading after the budget airline agreed in principle to a £5.5 billion ($7.3 billion) takeover from U.S. private credit firm Castlelake.

easyJet plc, ESYJY

The stock hit 617p, a new 52-week high, up from Friday’s close of 558.2p. The offer values EasyJet at 690p per share in cash, representing roughly a 20% premium to where the stock was trading before the deal was announced.

This is the fifth bid Castlelake has made for EasyJet since first approaching the airline on May 29. The opening offer was 560p per share. Each rejected bid pushed the price higher.

EasyJet’s board previously turned down a £4.93 billion offer last month. The latest proposal was agreed on Sunday.

The two companies have extended the “put up or shut up” deadline to August 3 at 5 p.m. London time. Castlelake must either make a firm offer or walk away by that date.

In a joint statement, the two sides said Castlelake “intends to support the company’s future growth and transformation to a stronger, more resilient European airline.” Castlelake also said it backs EasyJet’s fleet modernisation program.

Minneapolis-based Castlelake is a major player in aircraft leasing — not a traditional private equity buyout firm. That detail has analysts asking questions about what happens next.

What Analysts Are Watching

Bernstein analysts said they believe Castlelake could be planning to break up EasyJet rather than run it as a whole business. The firm’s assets include a modern Airbus A320-family fleet and valuable landing slots at London, Milan, and Geneva airports.

The analysts added that any asset break-up could tighten aircraft supply in intra-European aviation, which would benefit other carriers — including low-cost rivals and UK leisure operator Jet2, which saw its stock rise nearly 4% on Monday.

EasyJet’s Financial Position

EasyJet has been under financial pressure. In its most recent half-year results, published May 21, the airline posted a pre-tax loss of £552 million for the six months ending March 31.

Revenue rose 12% to £4 billion in that period, but rising jet fuel costs — linked to the Middle East conflict — weighed heavily on margins. EasyJet’s EPS of -£0.501 missed analyst forecasts of -£0.4345 by 15.3%.

The International Air Transport Association has warned that global airline profits could be halved this year, with jet fuel costs expected to run roughly 70% higher year-on-year.

Castlelake has partnered with Mark Breen and Peter Bellew — a former EasyJet executive who left the airline in 2022 — as part of the proposed transaction.

The Haji-Ioannou family, linked to EasyJet founder Stelios, holds a 15.3% stake and remains the airline’s largest single shareholder.

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