easyJet has reached an agreement in principle with Castlelake on the key financial terms of a takeover, saying it would be minded to recommend the US investment firm’s latest proposal of £6.90 per share in cash to shareholders.
The fifth offer from Castlelake was submitted on 4 July and covers the entire issued share capital not already held by the firm, with a partial unlisted share alternative also available.
Castlelake currently owns 2.14% of easyJet.
The eayjet board said the financial terms are at a level it would recommend if a firm offer were announced, subject to agreement on all other terms and conditions.
“easyJet appears to be on final approach for a move into private ownership after its board indicated it would be minded to recommend a sweetened £5.5 billion takeover offer from US investment firm Castlelake, marking a significant shift after previously dismissing earlier approaches as “highly opportunistic”,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.
Castlelake has said it would commit to using best endeavours to secure the regulatory clearances needed to complete a deal, and has stressed its respect for easyJet and its people, along with its intention to back the airline’s transformation into a stronger, more resilient European carrier.
It also supports easyJet’s fleet modernisation programme, which it views as central to the company’s long-term competitiveness.
There are strict rules for airline operators in Europe that Castlelake would need to satisfy.
The 690p offer is at a significant premium to the level easyJet shares were trading at before rumours of a takeover first broke. But it is well below where easyjet shares have traded in recent years.