EasyJet has given private equity firm Castlelake until Friday to make a formal takeover bid, after extending its deadline to match a rival offer from Apollo.
The airline today repeated its recommendation that shareholders accept the Apollo deal, which values the company at £7.15 per share. Castlelake now has until Friday to submit an improved bid, after EasyJet extended the 'put up or shut up' deadline from 5pm today.
Last month EasyJet said it had agreed to a £5.5 billion takeover by Castlelake, after rejecting four earlier bids from the firm that it branded 'highly opportunistic'. Days later, rival Apollo trumped that offer with its own £5.7 billion bid, which EasyJet's board accepted.
Russ Mould, investment director at stockbroker AJ Bell, said Friday's outcome would reveal whether appetite for EasyJet had been affected by the latest events in the Middle East.
Profits plunge amid fuel price surge
EasyJet's profits plunged by 70 per cent in the third quarter, as the Iran war fuelled a surge in fuel prices while customer demand fell. Even if a formal takeover is agreed this week, questions remain over ownership structures, with EasyJet expected to face regulatory hurdles.
The European Union is reportedly preparing to review ownership rules to prevent foreign investors gaining control. The rules still apply to EasyJet after it set up a subsidiary in Austria to keep operating flights in the bloc after Brexit.
Founder's family stake could prove decisive
Any bid for EasyJet is also likely to require the backing of founder Sir Stelios Haji-Ioannou and his family, who still own a 15.3 per cent stake in the company.
Mould added that if a deal does go through, EasyJet shareholders might have mixed feelings, since the takeout price is above levels seen in recent years but below the immediate post-Covid highs, and less than half the levels reached in the mid-to-late 2010s.
Part of wider takeover wave
A takeover would mark another blow to the London stock market, which has seen a wave of takeover activity from foreign buyers. Other targeted companies include Tate & Lyle, Beazley, Schroders and the owner of William Hill.
