easyJet Agrees to Castlelake's Takeover Proposal, But It's Not a Done Deal

easyJet has agreed to a takeover proposal from Castlelake, valuing the airline at around £5.2 billion. easyJet's board said it would be minded to recommend the offer if Castlelake makes a formal bid. However, there are still several hurdles to clear before the deal can be completed. easyJet's shareholders must approve the offer, and the airline must also comply with EU rules requiring airlines operating within the bloc to be majority-owned and effectively controlled by EU citizens. easyJet's shares rose sharply after the announcement but still traded below the offer price — a sign investors aren't ready to bet this deal actually closes. easyJet has had a rough few years. The pandemic crushed travel, then inflation, fuel volatility and geopolitical shocks made the recovery bumpier than anyone would prefer. More recently, the US-Israel war with Iran pushed up fuel costs and hit sentiment across travel stocks. easyJet also posted a large first-half loss despite rising revenue, reminding investors that an airline can grow sales and still make everyone nervous. easyJet's board is accepting the logic of selling just as the recovery story might finally be getting interesting. easyJet spent weeks telling Castlelake to come back richer. Castlelake did. That's the easy version. The harder version is that easyJet's board is accepting the logic of selling just as the recovery story might finally be getting interesting. easyJet's management has proposed a structure where Castlelake would hold 49%, while two EU nationals, aviation executives Peter Bellew and Mark Breen, would own a majority EU-based vehicle controlling the airline. easyJet's board said the financial terms are at a level it would be prepared to recommend to shareholders if a formal offer materializes. Castlelake now has until 5 p.m. London time on August 3 to announce a firm intention to bid or walk away under UK takeover rules. easyJet's shares rose sharply after the announcement but still traded below the offer price — a sign investors aren't ready to bet this deal actually closes.