Easyjet shares soar after takeover rumour
Shares in budget airline easyJet soared 20% today 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 the UK, Iceland Express and Icelandair as potential suitors for the no-frills carrier.
An easyJet spokesman said that no takeover approach had been received and denied 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 £628m (€908m).
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 no-frills airline 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 today’s dealings merely signalled a 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 (€260m).
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 (€86m), 16% up on last year and higher than the £52m (€72m) 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.
