London, United Kingdom: British low-cost carrier easyJet has rejected a third takeover proposal from the U.S.-based investment firm Castlelake, prompting the investor to take its bid public days before a regulatory deadline that could determine whether a formal offer materializes.
Castlelake’s latest proposal values easyJet at approximately £4.7 billion ($6.3 billion), offering shareholders 625 pence per share in cash. The airline’s board unanimously rejected the approach, describing it as “highly opportunistic” and stating that it “fundamentally undervalues easyJet and its medium-term prospects.”
The public disclosure marks a significant escalation in the takeover battle after weeks of private discussions and rejected proposals.
According to documents released by both parties, Castlelake initially approached easyJet with a non-binding proposal of 560 pence per share. After that offer was rejected, the investment firm returned with a second proposal at 600 pence per share before ultimately increasing its offer to 625 pence per share.
The latest proposal was submitted on June 20 and rejected by easyJet’s board on June 21.
Castlelake said it decided to go public because the airline had repeatedly declined to engage meaningfully with the firm despite multiple approaches.
The company stated that the third proposal represented a substantial premium to easyJet’s market value before takeover speculation emerged, arguing that shareholders should be given the opportunity to consider the proposal.
In its response, easyJet said the proposal arrived during a period when the airline sector was facing temporary pressures linked to geopolitical instability and rising fuel costs.
The board said, “It believes that the proposal is highly opportunistic and fundamentally undervalues easyJet and its medium-term prospects.”
The airline added that Castlelake’s valuation relied heavily on short-term market conditions rather than the company’s long-term earnings potential, strategic position, asset base and growth plans.
Directors also raised concerns regarding what they described as an opaque acquisition structure, uncertainties surrounding future financing arrangements and questions about regulatory implementation. The board concluded that accepting the proposal would not be in the best interests of shareholders.
Castlelake’s proposal is structured as an all-cash offer for easyJet shares. The firm also included a partial alternative under which shareholders could elect to receive unlisted, non-transferable and non-voting equity interests in a Castlelake-controlled acquisition vehicle instead of cash for a portion of their holdings.
According to disclosures, the proposed ownership structure would consist of:
• 49% ownership by Castlelake funds.
• 51% ownership by European Union nationals and other investors.
The structure was designed to satisfy European airline ownership regulations, which require EU airlines to remain majority owned and controlled by EU interests.
To achieve compliance, Castlelake partnered with former easyJet Chief Operating Officer Peter Bellew and aerospace executive Mark Breen, who would participate in the EU-controlled ownership arrangement.
The investment firm said the structure had been specifically designed to preserve easyJet’s European operating rights and regulatory approvals. easyJet, however, expressed reservations about the proposed arrangement. The airline said the structure lacked transparency and created uncertainty over who would ultimately exercise control over the carrier.
The board also questioned how the ownership model would operate in practice and whether it would satisfy regulatory requirements across the jurisdictions in which easyJet operates.
Castlelake rejected those concerns and said its proposal was fully compliant with applicable regulations. The investment firm stated that it had no intention of dismantling easyJet’s operations and instead sought to support future growth.
Castlelake said the proposed acquisition would be funded through a combination of equity and debt financing.
The company disclosed that Goldman Sachs had indicated its ability to arrange the required debt facilities. The firm added that the proposal was expected to be fully funded if a formal offer proceeded.
Castlelake currently manages approximately $36 billion to $38 billion in assets globally and has extensive experience investing in aviation-related businesses.
Its previous aviation investments have included Scandinavian Airlines (SAS), while it has also explored opportunities involving U.S.-based carriers.
Under the UK Takeover Code, Castlelake has until 5:00 p.m. on June 26, 2026, to either:
• Announce a firm intention to make an offer for easyJet; or
• Confirm that it does not intend to proceed.
Any extension would require approval from the UK Takeover Panel. As of the latest disclosures, Castlelake stressed that no formal offer had yet been made and that there remained no certainty a definitive bid would ultimately emerge.
Several major shareholders appear unconvinced that the current offer adequately reflects easyJet’s value. According to reports, investors believe meaningful engagement would likely require a proposal of at least 700 pence per share, implying a valuation exceeding £5.3 billion.
That figure would be roughly £600 million higher than Castlelake’s current proposal. Investors point to easyJet’s extensive aircraft fleet, valuable airport slots, strong balance sheet and rapidly expanding holidays division as reasons the airline should command a higher valuation.
The airline has repeatedly highlighted its medium-term growth plans as justification for rejecting the proposal.
easyJet believes investments in newer, more fuel-efficient aircraft, operational improvements and expansion of its holidays business could support significantly higher profitability in coming years.
The company has previously outlined ambitions to generate annual profits approaching £1 billion over the longer term. Management argues that the current proposal fails to capture the value of those future earnings opportunities.
Market attention has increasingly focused on easyJet founder Sir Stelios Haji-Ioannou, whose family retains approximately a 15% shareholding in the airline. While Castlelake’s proposal includes mechanisms that could appeal to long-term investors, Haji-Ioannou has not publicly indicated whether he supports or opposes the bid.
For now, easyJet’s board remains firmly opposed to the proposal, maintaining that the airline’s long-term value, growth prospects and strategic position justify a substantially higher valuation than the one currently on the table.
