EasyJet shares rise over rumours

SHARES in budget airline EasyJet soared 20% yesterday on the back of rumours that an Icelandic carrier was mulling a takeover bid.

Traders named Air Atlanta Icelandic, which recently took over Excel Airways in Britain, Iceland Express and Icelandair as potential suitors.

An EasyJet spokesman said that no takeover approach had been received and went on to deny that founder Stelios Haji-Ioannou was ready to take the company private.

Any takeover attempt would need the blessing of Mr Haji-Ioannou, who still owns more than 40% of the company.

More than 40 million shares in easyJet changed hands on an unusually-hectic day of trading to give the carrier a new value of £628 million.

The EasyJet spokesman said Mr Haji-Ioannou had neither sold any of his shares recently nor been contacted by any parties interested in buying the company.

He added: “Stelios reiterates his statement of a few weeks ago that he has no current plans to take the company private.”

Rival Ryanair strongly denied it was mulling a takeover bid.

A spokesman said: “It would be a cold day in hell before we would be interested in an outfit like that.”

Traders saw Icelandair as the most likely suitor, but it was unclear whether yesterday’s dealings merely signalled the company was making strategic investment.

Morgan Stanley analyst Penny Butcher said an outright takeover bid from Icelandair would be “difficult to put together” since the company was valued at only £180m.

She added: “It would deviate significantly from the stated business strategy (of Icelandair) which is focused almost entirely on north Atlantic routes.”

Luton-based EasyJet said earlier this month that it expected pre-tax profits for the year to top £60m, 16% up on last year and higher than the £52m it predicted in June. High oil prices and tough competition have put the airline under pressure this year, but the group cheered investors with news that passenger numbers rose by 25% in September.