EasyJet set for takeover in Irish-backed €6.4bn bid

Budget airline easyJet has agreed in principle to a sweetened takeover bid from US investment firm Castlelake - backed by two Irish aviation executives - that values the carrier at up to £5.5bn (€6.4bn), a potential shakeup for Europe's aviation sector. Picture: PA

Budget airline easyJet has agreed in principle to a sweetened takeover bid from US investment firm Castlelake - backed by two Irish aviation executives - that values the carrier at up to £5.5bn (€6.4bn), a potential shakeup for Europe's aviation sector.

Castlelake said its proposal is backed by two prominent Irish aviation executives: former Malaysia Airlines CEO Peter Bellew and Mark Breen. The partnership would bring Mr Bellew back to easyJet, where he served as chief operating officer from 2020 to 2022. He had left Ryanair to join easyJet, which prompted a non‑compete challenge that subsequently failed.

Mr Breen is currently CEO of Dublin-based Oneiros Aerospace, having previously worked for Oman Air.

The new offer at £6.90 a share represents a 73% premium to easyJet's closing price on May 29, when the private equity fund manager disclosed its interest in the airline to British regulators, driving the shares up steeply since then.

The deal, which would see the US  investor take 31-year-old easyJet private, coincides with operating challenges for airlines globally as they grapple with sharply higher fuel prices and profit pressure due to the Iran conflict.

Locked in fierce competition with rival Ryanair, easyJet had long been viewed as a takeover target with its valuable landing slots at airports including London Gatwick, Paris, and Geneva attractive to potential bidders.

EasyJet in June rejected a £4.93bn proposal from Castlelake but signalled an interest in continuing talks by granting the private equity manager limited access to the airline's commercial data.

On Sunday, easyJet's board said that the latest bid was at "a value that the Board would be minded to recommend to easyJet shareholders", though added Castlelake now needed to submit its firm intention to make an offer by August 3.

Castlelake, which is a major lender to airlines and has leased airplanes to about 200 airlines, declined to comment beyond its joint announcement of the deal with easyJet, citing regulatory restrictions.

Analysts had raised questions about whether Castlelake could meet European Union regulations requiring airlines operating in the bloc to be majority owned and controlled by EU nationals. But it's believed Mr Bellew and Mr Breen would own 51% of the bidding vehicle with Castlelake owning 49%, thereby adhering to the EU rules.

EasyJet, which flies low-cost routes in 38 European countries, operates 355 aircraft across more than 1,200 routes and struggled to recover since the COVID-19 pandemic. But its package holidays business and efficient Airbus fleet have been bright spots.

British Cypriot entrepreneur Stelios Haji‑Ioannou, who founded easyJet in 1995, left the board in 2010 but remains the biggest investor with a roughly 15% stake alongside his family. He has had a history of public clashes with management over growth plans.

The British market is on course to set a mergers and acquisitions record in 2026 as weaker valuations among London-listed companies attract buyers. EasyJet initially said Castlelake's approach was "highly opportunistic" as the Iran war turmoil depressed its shares.

Reuters