EasyJet shines in London by rejecting Castlelake’s £5 billion bid
This is the investment fund’s third offer, which involves a premium of 59 per cent at 625 pence. The airline had previously rejected two other offers of 560 and 600 pence
(Il Sole 24 Ore Radiocor) - EasyJet shares rise on the London Stock Exchange following the rejection of the third bid by the Castlelake investment fund. Specifically, according to a statement from the fund itself, EasyJet’s board of directors, which met the day before, rejected an offer of 625 pence per share, valuing the British group at nearly 5 billion pounds (5.7 billion euros). This was Castlelake’s third proposal, after the low-cost airline had previously rejected an initial offer of 560 pence per share and then one of 600 pence per share. Castlelake stated that the third proposal represents a premium of around 59 per cent compared with EasyJet’s share price of 394 pence on 28 May, the last day before its stake in EasyJet became public.
Under the UK Takeover Code, Castlelake has until 17:00 on 26 June to announce a formal bid for EasyJet or to state that it does not intend to make one.
The investment fund stated that the third proposal ‘should be financed entirely through a combination’ of equity instruments and debt facilities, with Goldman Sachs having ‘indicated’ its ability to arrange the debt financing required. Furthermore, Castlelake added that it also intends to offer a partial equity participation option to allow EasyJet shareholders to retain stakes in the low-cost airline.
“Castlelake’s aim is to support EasyJet in becoming a stronger and more resilient European airline, under European control, whilst respecting EasyJet’s valuable assets and continuing to support its network, serve the passengers who rely on it and enable future growth. Castlelake is committed to working constructively with employees, regulators and the government, and to being transparent about its intentions throughout this process,” the fund explained in a statement.
