Shares of easyJet jumped sharply Monday after the airline's board agreed in principle to a £6.90-per-share all-cash takeover by U.S. private investment firm Castlelake, a deal that would end three decades as a public company — and hand control of one of Europe's biggest budget carriers to a private credit shop during one of aviation's most turbulent stretches.
• Five Bids Later, Castlelake Finally Got a Yes
This marks the fifth and highest offer from the Minneapolis-based firm, which raised its bid from an opening 560 pence all the way to 690 pence since first approaching the airline on May 29.
EasyJet had called the previous proposals "highly opportunistic," but ultimately opened its books after rejecting a £4.93 billion offer in June. The new offer represents a 73% premium to easyJet's closing price on May 29. Still, at £6.16 on Monday — roughly 11% below the bid price — the market is pricing in meaningful completion risk.
• The Iran Conflict Made easyJet Vulnerable
Castlelake swooped in as the UK budget carrier was reeling from soaring jet fuel prices and suppressed demand after the Iran war.
EasyJet had been deemed vulnerable to a takeover this year because of two profit warnings in the spring and a difficult macroeconomic backdrop tied to the fuel price surge. That weakness gave a private equity buyer leverage to acquire prized assets — including a modern Airbus fleet and coveted landing slots at London, Milan, and Geneva airports — at a cyclical low.
• EU Ownership Rules Are the Deal's Biggest Hurdle
The takeover terms hinge on EU ownership rules requiring airlines operating in the bloc to be majority owned and controlled by EU nationals.
Castlelake previously said it would own 49% of the bidding vehicle, with the remainder held by two EU nationals, former Malaysia Airlines CEO Peter Bellew and senior industry executive Mark Breen. Any regulatory stumble here could kill the transaction.
• The Clock Is Ticking — and a Rival Bid Isn't Impossible
EasyJet's board said it was "minded to recommend" the price to shareholders if a firm offer is made by August 3.
The agreement in principle still requires due diligence and customary procedures before any formal launch. Founder Stelios Haji-Ioannou's family holds a ~15% stake and has had a history of public clashes with management over growth plans — making his endorsement critical. Meanwhile, some shareholders argue the airline, once valued far higher, is being sold at the bottom of the cycle. The gap between today's price and the bid signals the market agrees: this deal is far from done.