EasyJet (EZJ) is on the verge of being taken private after its board reached an agreement to recommend a £5bn takeover offer from private equity firm Castlelake.
The deal would mark the departure of another significant FTSE 350 company from the London Stock Exchange, continuing a trend that has raised concerns among investors and policymakers about the health of UK public markets.
Castlelake’s latest bid values EasyJet shares at £6.90 each, a figure the airline’s board has indicated it is prepared to put to shareholders for approval.
The £6.90 offer represents the fifth consecutive bid that Castlelake has submitted for the budget carrier, reflecting months of persistent pursuit by the American private equity firm.
The latest figure is a substantial step up from Castlelake’s opening offer of £5.60 per share, though it still falls short of the £7 per share that some shareholders had been pushing for.
“Having carefully reviewed it with its advisers, the board of easyJet concluded that the financial terms of the fifth proposal are at a value that the board would be minded to recommend to Easyjet shareholders,” EasyJet said in a statement.
The board’s change of stance is a notable shift after the airline spent much of the takeover process firmly rebuffing Castlelake’s advances and questioning the firm’s motives.
EasyJet had previously described earlier approaches from Castlelake as “opportunistic,” signalling that the board believed those bids significantly undervalued the business.
The decision to finally engage and signal support for the fifth offer suggests the board was ultimately persuaded that the revised terms adequately reflected EasyJet’s underlying value and prospects.
Castlelake, a Minneapolis-based alternative asset management firm, has built a reputation for investing in aviation assets and has been steadily expanding its presence in the sector in recent years.
For EasyJet, the potential transaction represents a significant moment in the airline’s history, having operated as a publicly listed company since its flotation on the London Stock Exchange in 2000.
Shareholders will now be closely watching whether the £6.90 per share offer is sufficient to secure the level of support needed for the deal to proceed to completion.