easyJet opens door to Castlelake after rejecting sweetened fourth bid
easyJet PLC on Thursday said it is willing to allow potential suitor Castlelake LP access to limited commercial information in order to produce a proposal that better reflects the value of the airline.
The Luton, Bedfordshire airline said it had rejected a fourth bid plan from Minneapolis-based asset manager Castlelake on Tuesday, worth 650 pence per share, putting a value of £4.93 billion on the FTSE 250-listing.
On Monday, easyJet said it had rejected a third proposal from Castlelake worth 625p per share. Castlelake made a first cash bid for the budget airline of 560 pence per share on June 12. A second tilt of 600p per share was made on June 17.
On Thursday, easyJet traded 5.1% higher at 566.87 pence each in London for a market value of £4.30 billion.
easyJet said the latest proposal ‘substantially’ undervalues the company and its prospects and continues to give rise to ‘significant’ questions of deliverability.
However, the firm believes that giving Castlelake access to limited commercial information, as the US entity has sought, might produce a ‘more attractive proposal that better reflects the value of easyJet and its prospects.’
As a result, Castlelake has been granted a 9-day extension until July 5 to make a firm bid proposal, after easyJet requested an extension to the offer deadline, which the Panel on Takeovers and Mergers agreed to.
easyJet said it continues to be concerned about the ownership structure and deliverability of any offer from Castlelake, and the time it will take, and expects ‘satisfactory assurances and commitments in these regards’.
Castlelake has partnered with Peter Bellew and Mark Breen as EU national individual investors. Bellew is a former chief operating officer of easyJet, while Breen is chief executive officer of consultancy Oneiros Aerospace and formerly led Saudi Arabian budget carrier flyadeal.
On Monday, easyJet called the envisaged ownership structure ‘opaque’, noting the bidding vehicle would be owned 49% by Castlelake and 51% by EU nationals and ‘potentially other investors which have not been disclosed’.
easyJet said it is in a ‘position of strength, underpinned by an investment grade balance sheet with a net cash position, alongside strong customer satisfaction and high employee engagement.’
It remains ‘highly confident’ in its strategy and ability to deliver attractive long-term value for shareholders.
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