Easyjet shares flew on Monday after Castlelake confirmed its interest in the budget airline group following media reports over the weekend.
Eastjet shares were 11% higher at the time of writing despite no formal talks between the two parties.
The interest was labelled ‘opportunist’ by the Easyjet board, who pointed to a depressed share price resulting from the conflict in the Middle East.
“easyJet is at the centre of a storm of speculation over a takeover, with the rumours lifting shares sharply in anticipation of a potential deal,” said Susannah Streeter, Chief Investment Strategist, Wealth Club.
“The airline has been hit by a severe bout of turbulence sparked by the war in Iran and now private equity firm Castlelake appears ready to pounce. The airline has been battling headwinds from escalating tensions in the Middle East, which have rattled consumer confidence, driven up fuel costs and cast a shadow over the outlook for European travel demand.”
Easyjet shares are down 22% over the past year and 43% over five years.