22 Jun (Reuters) – Castlelake disclosed its £4.74 billion ($6.26 billion) acquisition plan for easyJet on Monday, increasing pressure on the low-cost airline’s board of directors, who promptly rejected the proposal as “opportunistic” and “contrary to the best interests of shareholders”.
Minneapolis-based Castlelake, which is a major investor in the aviation sector and manages about $38 billion in assets, said the move would allow easyJet shareholders to evaluate the merits of the offer and express their views before the offer deadline on June 26.
“There will be increased pressure on the board this week,” Goodbody Stockbrokers analyst Dudley Shanley said of Castlelake’s proposed offer price of £6.25 per share.
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Shares in the British airline, founded by British-Cypriot businessman Stelios Haji-Ioannou in 1995, rose more than 5% in early trading to £5.30, their highest level in almost a year.
“The board of directors believes that the Third Proposal represents an opportunistic attempt to acquire easyJet ‘on the cheap’ and is therefore not in the best interests of easyJet shareholders,” the low-cost airline said in a statement.
Castlelake said its proposal has the support of former Malaysia Airlines chief executive Peter Bellew and another EU citizen in an attempt to overcome potential European regulatory hurdles.
EASYJET FOCUSED ON GOALS
EasyJet stated that it is focused on its medium-term goals and the growth of its vacation segment, which has represented an increasingly larger portion of profit, despite the uncertainties.
Castlelake’s bid of £6.25 per share, presented on June 20, represents a premium of around 57% to easyJet’s share price on May 29 — before the US group disclosed its interest — and follows two previous offers of £5.6 and £6.0.
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The company stated that easyJet’s “reluctance to engage in a meaningful way” was the reason for making the offer public, which included a partial shareholding alternative for easyJet investors.
