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EasyJet Rejects Castlelake's Fourth Takeover Bid, Opens Door to New Offer

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EasyJet Rejects Castlelake's Fourth Takeover Bid, Opens Door to New Offer

British budget airline easyJet (EZJ.L) rejected a fourth and improved takeover proposal by US investment firm Castlelake, while agreeing to continue discussions in the hope of securing a better deal.

In a statement filed Thursday, easyJet said its board continues to believe that the latest offer of 6.5 pounds sterling per share of the airline, up from the previous 6.25 pound-per-share proposal, "substantially" undervalues the company and its prospects.

The airline's board, however, agreed to grant Castlelake limited access to certain commercial information. The board said the access, requested in the letter accompanying the fourth proposal, "might produce a more attractive proposal that better reflects the value of easyJet and its prospects and the interests of shareholders thereto."

At easyJet's request, the deadline for Castlelake to table a firm offer was extended to July 5. The airline's shares gained more than 5% in early morning trading in London following the announcement.

The easyJet board also reiterated concerns regarding the proposed ownership structure and the overall deliverability of the acquisition. Castlelake has added US-based asset manager Brookfield Asset Management to the bidding vehicle, alongside European nationals and aviation industry executives Peter Bellew and Mark Breen.

Under the new proposed structure, Castlelake and certain co-investors including Brookfield would own 49% of the vehicle, while the remaining 51% would be owned by EU investors. EasyJet said its board expects Castlelake to provide "satisfactory assurances and commitments" regarding its concerns.

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