EasyJet is navigating internal divisions as it faces a multi-billion-pound takeover bid from US investment firm Castlelake. The low-cost airline’s board is reportedly divided, with chairman Stephen Hester appearing more inclined toward a sale, while other directors remain cautious. Castlelake’s latest offer of £4.9 billion, valuing easyJet at 650 pence per share, was rejected, but the airline has invited the firm to submit an improved bid by July 5.
The bid marks the fourth proposal from Castlelake, which the easyJet board broadly views as undervaluing the company. In response, easyJet has granted Castlelake access to limited commercial information to help facilitate a more competitive offer. Some board members are believed to be holding out for a valuation closer to 1,000 pence per share, with founder and largest shareholder Stelios Haji-Ioannou, who retains a 15% stake, reportedly seeking a significantly higher price before agreeing to sell.
Castlelake, known for an active role in the aviation sector, notably led a consortium that rescued Scandinavian Airlines (SAS) in 2023 before quickly selling its stake to Air France-KLM. Analysts suggest that Castlelake’s acquisition interest is driven less by passenger service ambitions and more by the potential to exploit valuable assets such as easyJet’s substantial fleet of approximately 200 Airbus short-haul aircraft and around 290 additional planes on order. The airline’s dominance of airport slots, particularly at London Gatwick, also represents a critical strategic asset in an industry where flight timings and airport access can define competitive advantage.
The proposed takeover structure involves Castlelake holding a 49% stake, with the remaining 51% owned by European Union citizens to comply with EU rules requiring majority ownership by EU nationals due to easyJet’s significant operations within the bloc.
Hester’s willingness to consider a sale draws attention given his history with key UK-listed firms. In 2020, he was chief executive of insurer RSA during a notable £7.2 billion foreign takeover. Observers note that private equity bids often place boards under considerable pressure to accept offers, balancing fiduciary duties against shareholder expectations and executive incentives linked to takeover outcomes.
The prospective acquisition highlights ongoing concerns about the impact of foreign buyouts on UK companies. Such transactions can result in the relocation of headquarters, reductions in tax contributions, and potential pension scheme exposures. EasyJet, which has built its reputation as a popular low-cost airline facilitating European travel for millions, faces the risk of fundamental change amid these developments.
While an insider close to easyJet dismissed suggestions of boardroom division, the bid exemplifies the broader trend of UK-listed firms increasingly targeted by overseas investors. Recent high-profile foreign bids have included warehouse group Segro and others in sectors ranging from insurance to energy and financial services, reinforcing London’s status as a sought-after venue for international acquisition activity.
EasyJet has declined to comment on the takeover discussions.