easyJet has agreed in principle to a £5.5 billion ($7.34 billion) takeover proposal from U.S. investment firm Castlelake, a deal that could take one of Europe’s largest low-cost airlines private after more than a quarter-century on the stock market. The airline’s board is now prepared to recommend the improved £6.90-per-share offer after rejecting several lower approaches and previously describing Castlelake’s bid as opportunistic.
Investors sent easyJet shares sharply higher after the announcement, but the takeover is not yet complete. Castlelake still faces a major aviation-specific obstacle: European ownership and control rules require EU airlines to remain majority EU-owned, so the proposed structure would place 51% of the bidding vehicle under two European nationals while Castlelake holds 49%. The bidder now has until August 3 to make a firm offer or walk away.
If completed, the transaction would be one of the biggest airline takeovers in recent years and would place a major European carrier, its large Airbus fleet and its fast-growing holidays business under private ownership. For easyJet, which has been publicly traded since 2000, it could mark the end of an era and the beginning of one of the most closely watched ownership changes in European aviation.
