easyJet shares up amid 'highly opportunistic' approach from Castlelake
easyJet PLC on Monday said it remains ‘highly confident’ in its strategy and that Castlelake LP was being ‘highly opportunistic’ with the timing of a possible takeover offer.
On Friday, Minneapolis-based asset manager Castlelake confirmed that it is in the early stages of considering a possible offer for Luton, Bedfordshire airline easyJet but that no approach has been made.
On Monday, Castlelake, which holds a 2.1% stake in the FTSE 250-listed company, said if it were to make an offer, it would at no less than 403.23 pence per share.
Shares in easyJet traded 12% higher at 445.80p each in London on Monday morning. They have fallen 23% in the last 12 months impacted by higher fuel costs and disruption to travel caused by the Middle East crises. Back in 2015, they traded above 1,600p per share.
Responding to the approach on Monday, easyJet said it has ‘not had any discussions with, nor received any approach or proposal from Castlelake.’
easyJet called the timing of the approach ‘highly opportunistic’ given the share price is ‘temporarily depressed’ due to the current situation in the Middle East and its impact on customer confidence and jet fuel prices.
The airline also highlighted the ‘considerable’ regulatory, financial and other execution challenges associated with a potential takeover.
‘The board remains highly confident in easyJet‘s strategy and its ability to deliver attractive long-term value for shareholders,’ the company said, noting an ‘investment grade balance sheet with a net cash position.’
‘easyJet is in a position of strength,’ it continued, adding it remains ‘focused on executing its medium-term target of delivering greater than £1 billion profit before tax.’
In March, easyJet was relegated to the FTSE 250 index from its previous spot in the FTSE 100, and last month it warned of a wider loss in its first half, due to the spike in fuel prices triggered by the Middle East war.
The carrier estimated a headline pretax loss between £540 million and £560 million for the six months to the end of March, compared with a loss of £394 million loss the year prior.
Earlier this year, Castlelake held talks concerning a possible offer for US-based Spirit Airlines Inc, though it did not move ahead with a deal. It had previously taken a stake in Scandinavian airline SAS, before selling the position to Air France-KLM SA. Castlelake has around $37 billion in assets under management.
Back in 2021, easyJet had rejected an unsolicited bid from Budapest-based peer Wizz Air Holdings PLC.
Under UK takeover rules, Castlelake must announce a firm intention to make an offer or walk away by June 26.
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