Low-cost airline easyJet (LON:EZJ) said it rejected the latest offer from US firm Castlelake, pitched at 650p per share. However, the firm left the door open to a higher offer and extended the PUSU (put up or shut up) deadline to 5 July.
Close but no cigar
To recap, specialist aviation investor Castlelake has made four offers so far. Its latest 650p per share gambit values easyJet’s equity at £4.9 billion against a current market cap of around £4 billion.
The US investor clarified again easyJet would be owned by a holding company 51% owned by EU nationals to comply with EU ownership rules. Castlelake and its co-investors, including Brookfield Asset Management (NYSE:BAM), would own 49% of the holding company.
EasyJet said it was ‘concerned about the ownership structure and deliverability of any offer from Castlelake’. The firm also expressed concern over the time needed to meet regulatory conditions and the potential impact on its share price.
However, it said giving Castlelake access to limited commercial information ‘might produce a more attractive proposal’ to better reflect the business’s value and prospects.
The tricky question for Castlelake is how to value a business with attractive assets but volatile earnings. At the end of 2025, easyJet said its assets were worth £4.8 billion.
On top of that, the firm maintains it can make pre-tax profit of more than £1 billion. If it actually achieves that, then £4.9 billion will seem like a bargain.
Shareholders might as well see what Castlelake’s next move is, or there might even be a rival approach. There’s no doubt a European bidder would have an easier ride as far as the board and regulators are concerned.
Read the press release here:https://corporate.easyjet.com/home/default.aspx
