easyJet rejects £4.93bn Castlelake bid

easyJet Plc has rejected a fourth takeover proposal from investment firm Castlelake LP that values the UK low-cost carrier at about £4.93 billion. The latest approach, pitched at £6.50 per share, was considered by the airline’s board together with its advisers before being formally turned down.

The board concluded that the sweetened bid still undervalues the company. It stated that the price offered does not adequately reflect easyJet’s current value or its prospects, even though the proposal represented a higher level than Castlelake’s previous approaches.

By rejecting the offer, easyJet signalled that it is not prepared to recommend the current terms to shareholders. The carrier’s stance indicates that any change of control would need to come at a valuation the board judges more aligned with its assessment of the business.

Alongside the rejection, easyJet has moved to keep the process active by seeking an extension of the firm-offer deadline under UK takeover rules to 5 July. This gives Castlelake a little more than an additional week to consider its options and determine whether to return with improved terms.

The airline plans to grant Castlelake limited access to commercial information that the investor had requested. easyJet has said that providing this information, within defined boundaries, might enable Castlelake to better assess the business and formulate a more attractive proposal.

The combination of a rejected offer and an extended timetable leaves the door open to further engagement. It preserves optionality for easyJet and its shareholders while putting the onus on Castlelake to decide whether to raise its bid before the revised deadline.

The latest developments underline a negotiation dynamic in which easyJet is resisting a takeover at the current valuation but not closing off discussions. The company has publicly set out that £6.50 per share is insufficient, while also facilitating additional due diligence that could support a higher figure.

For Castlelake, the extra time and limited access offer an opportunity to refine its view of easyJet’s financial and commercial position. Any subsequent proposal would need to address the board’s concerns over valuation if it is to gain a more favourable reception.

Until the 5 July deadline, the focus remains on whether Castlelake will submit a revised firm offer and at what price. If no improved proposal is forthcoming by that date, the current approach would lapse under the applicable takeover rules, bringing this phase of the process to a close.