In a sudden about-face that promises to shake up Europe’s airline industry, British low-cost carrier EasyJet said Sunday that it has reached an agreement “in principle” for an acquisition by Minnesota-based alternative investment firm Castlelake.
EasyJet rejected several offers from Castlelake last month and insisted it had no interest in a sale. The airline’s leadership labeled Castlelake’s bidding “opportunistic,” given that the carrier was temporarily weakened by the high cost of jet fuel stemming from the war in Iran.
EasyJet appeared to walk back that language on Sunday, stating that Castlelake “has emphasised its tremendous respect for EasyJet and its people” and wants to “support its future growth and transformation to a stronger, more resilient European airline.”
“Having carefully reviewed it with its advisers, the board of EasyJet concluded that the financial terms of the fifth proposal are at a value that the board would be minded to recommend to EasyJet shareholders,” the carrier said.
Castlelake’s latest offer values EasyJet at approximately $7.34 billion. The deal is not final; the company has until Aug. 3 to firm up its offer.
Castlelake announced its interest in EasyJet in June and took the unusual step of making its bids public after the carrier proved reluctant to engage beyond simply reviewing and turning down its offers. The tactic was widely seen as an appeal to the airline’s shareholders.
Under U.K. law, Castlelake had 28 days to reach a preliminary understanding with EasyJet.
Some British commentators have voiced concern over the potential takeover, noting that EasyJet’s assets could be of greater value to Castlelake than the continued operation of the airline in its current form. EasyJet is the largest low-cost carrier in the U.K. by passengers carried and fleet size.
