EasyJet shares climbed about 10% in early trading after the British budget airline agreed in principle to a £5.5 billion takeover proposal from US investment firm Castlelake, marking a significant step toward one of the biggest aviation deals of the year.
The airline announced on Sunday that it was prepared to accept Castlelake’s revised offer of £6.90 per share, following weeks of negotiations between the two sides. The proposal values EasyJet at approximately £5.5 billion and could reshape the European airline industry if completed.
The latest offer represents a premium of nearly 24% over EasyJet’s closing share price on Friday and is around 73% higher than the airline’s share price on May 29, when Castlelake first revealed its interest. Since then, EasyJet’s stock has risen sharply as investors anticipated a possible acquisition.
The proposed transaction comes during a challenging period for the aviation sector. Airlines continue to face higher fuel costs and pressure on profit margins linked to geopolitical tensions in the Middle East. Despite these headwinds, EasyJet has remained an attractive acquisition target because of its valuable airport slots at major hubs including London Gatwick, Paris and Geneva.
Castlelake’s latest proposal follows the rejection of an earlier £4.93 billion bid in June. At the time, EasyJet described previous offers as undervaluing the company but agreed to continue discussions by allowing the investment firm limited access to its commercial information.
Under the proposed structure, Castlelake would own 49% of the acquisition vehicle, while the remaining stake would be held by two European Union nationals, former Malaysia Airlines chief executive and former EasyJet chief operating officer Peter Bellew, and aviation executive Mark Breen. The ownership arrangement is designed to comply with European Union rules requiring airlines operating within the bloc to be majority owned and controlled by EU nationals.
EasyJet said Castlelake has committed to using its best efforts to obtain all required regulatory approvals before the transaction can proceed.
Market analysts noted that regulatory issues and shareholder approval remain key hurdles. Analysts at JPMorgan said questions remain over the proposed governance structure and whether major investors, including EasyJet founder and largest shareholder Stelios Haji-Ioannou, who controls roughly 15% of the company alongside his family, will support the deal. They also suggested the possibility of rival bids or interest in parts of the airline cannot be ruled out.
Castlelake, a major aircraft lessor and lender to airlines worldwide, declined further comment beyond its joint statement with EasyJet because of regulatory restrictions.
Under UK takeover rules, Castlelake has until August 3 to submit a formal offer or withdraw its bid. If completed, the acquisition would take EasyJet private after more than two decades as a publicly listed company.
