𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

EasyJet has blasted a US suitor’s £4.74 billion takeover approach as an attempt to buy it “on the cheap” after rebuffing three proposals.

The budget airline said Castlelake’s latest possible offer, worth 625p-a-share, remained “highly opportunistic” and not in the best interests of shareholders.

It follows the move by Castlelake to go public on Monday with details of its third takeover proposal for the budget airline after its advances have been rejected, which sent shares in easyJet rising 3% to 518.5p in mid-morning trading.

Castlelake put forward a third approach to acquire easyJet on June 20 worth 625p a share, but this was declined on June 21.

EasyJet criticised the proposed bid, which had been increased from the previous proposals worth 560p a share and 600p a share.

It said: “The board of easyJet carefully considered the third proposal with its advisers and concluded that it is highly opportunistic, delivered against the backdrop of easyJet’s temporarily depressed share price, and still fundamentally undervalues easyJet and its prospects.”

“The board believes that the third proposal represents an opportunistic attempt to acquire easyJet ‘on the cheap’ and that it is therefore not in the best interests of easyJet shareholders,” the airline added.

Castlelake, which owns a stake of around 2.14% in easyJet through shares held on behalf of funds it manages, said it was taking its third proposed offer to easyJet shareholders after claiming the carrier has refused to engage “meaningfully”.

The US investment fund said: “Following the rejection of three proposals by the easyJet board, and given its unwillingness to engage meaningfully, Castlelake is announcing this third proposal to enable easyJet shareholders to consider its merits and provide their views on the third proposal to the easyJet board.”

It comes ahead of the upcoming so-called Put-up or Shut-up deadline set by the takeover panel at 5pm on June 26.

Castlelake insisted its latest possible bid offered “compelling value”, at a premium of around 59% on the 394.20p price of easyJet shares at market close on May 28, which was the day before its interest in the airline became public.

But Luton-based EasyJet said the takeover interest comes at a time when its share price has been pushed lower by worries over the impact of the Iran war on the airline sector.

The FTSE 250 firm’s shares were down around 30% in the past year, before news of the bid interest.

It highlighted its strong financial position and said it remained focused on its medium-term target to deliver more than £1 billion in pre-tax profits.

EasyJet also criticised the ownership structure being proposed as being “opaque”, claiming it would be 49% owned by Castlelake, and 51% owned by “EU nationals and potentially other investors which have not been disclosed”.

Castlelake said it had teamed up with EU national individual investors Peter Bellew and Mark Breen for its proposals, claiming they are “experienced executives who have successfully held senior positions in airlines, including European low-cost carriers”.

It said its possible offer “substantially de-risks the execution of the company’s business plan” and insisted it would offer current investors a “partial equity alternative to allow easyJet shareholders to remain invested in easyJet as a privately held business”.

Led by executive chairman and founder Rory O’Neill, Castlelake and has assets under management worth 36 billion US dollars (£27.3 billion).

It entered talks in January with bankrupt US carrier Spirit Airlines over a possible takeover.

Castlelake has also previously bailed out collapsed Scandinavian Airlines (SAS) and then sold its shares to Air France-KLM.