Easyjet relaxes limits on shares

Budget airline easyJet today loosened the controls on how many of its shares can be owned by overseas investors.

EasyJet met the clamour for its shares abroad by setting a new limit of 45% - up from the 40% it agreed with the Civil Aviation Authority at the time of its flotation in November 2000.

The move took place against a background of growing speculation that easyJet is a takeover target of the owner of Icelandic flag carrier Icelandair.

FL Group last month raised its stake in easyJet from 14% to 16.18% within 48 hours of buying Nordic carrier Sterling – the fourth-largest budget airline in Europe.

In a statement today, easyJet said limiting the ownership of its shares by overseas investors protected its operating rights and status as a UK airline.

But the recent wave of interest in its shares from abroad meant that the original 40% limit had been reached by the end of last month, persuading it to look again at whether controls should be relaxed.

“In order to provide greater flexibility for the company’s shareholders, the directors have determined to increase the permitted maximum to 45%,” easyJet said.

Should overseas investors breach this limit then easyJet said it could force them to dispose of some of their shares.

Other action may include refusing to register share transfers or suspending voting rights, easyJet added.

Directors werecurrently reviewing opportunities to fly beyond the boundaries of the European Economic Area and stood ready to take action on share ownership as a result.

Despite today’s change to the articles of association, it is thought easyJet could still become a takeover target of a foreign company if any bid is fronted by a UK venture capital partner.

But analysts believe any takeover bid would be difficult to accomplish as the family of founder and former chairman Stelios Haji-Ioannou owns around 40% and he has said he is reluctant to sell his stake.