EasyJet has reached an agreement in principle with US investment firm Castlelake regarding a potential takeover valued at approximately £5.2 billion. The proposed offer, announced on Sunday, amounts to £6.90 per share, representing a premium over previous bids from Castlelake that EasyJet had rejected.

Prior to this development, EasyJet dismissed four separate takeover proposals from Castlelake, which currently holds about a 2.14% stake in the airline through managed funds. Those earlier offers ranged between £5.60 and £6.50 per share, with EasyJet accusing Castlelake of attempting to acquire the company "on the cheap." The latest offer is notably higher than these earlier bids.

While the agreement in principle signals progress, the deal has not been finalized. Castlelake must still secure necessary regulatory approvals and clearances before proceeding. One key regulatory challenge involves European Union rules, which require that EasyJet remain at least 51% owned by European entities. As a US-based firm, Castlelake has indicated plans to comply with this ownership requirement but has not provided specific details.

The investment firm has until 5 p.m. BST on August 3 to either announce a firm intention to make an offer or declare that it does not intend to proceed. Should a formal offer be made, it will need to be submitted for shareholder approval.

EasyJet’s board noted that the terms of the proposed offer are at a level they would likely recommend to shareholders if a binding offer is presented. The airline, one of Europe’s largest, employs more than 19,000 people and operates approximately 1,200 routes across 35 European countries.

The company has previously described its share price as "temporarily depressed," attributing part of the impact to instability in the travel sector following the US-Israel conflict involving Iran. Shares closed on Friday at £5.58 each, having declined over 30% in the past year before the initial bid surfaced in June.

Castlelake manages assets totaling about $36 billion (£27.3 billion). In their joint statement, EasyJet highlighted Castlelake’s expressed respect for the airline and its workforce, along with the firm’s stated intention to support EasyJet’s future growth and transformation geared toward becoming a stronger and more resilient European carrier.