American investment fund Castlelake has confirmed it is considering a possible offer for budget airline easyJet.
The easyJet board described its suitor’s interest as “highly opportunistic” as its shares are currently depressed by global events affecting air traffic.
Castlelake is required to announce its intentions 5pm on 26 June unless an extension is granted by the takeover panel.
In a brief statement this morning, Castlelake said it “notes the recent speculation regarding easyJet. Castlelake confirms that it is in the early stages of considering a possible offer for the company. No approach has been made to the board of easyJet. There can be no certainty that any offer will be made, nor as to the terms of any offer.”
EasyJet said there have been no discussions. The board stated it will evaluate any proposal with a focus on valuation, particularly given the current temporary depression in easyJet’s share price due to geopolitical events and fuel prices, and will also consider the considerable regulatory and financial challenges of a takeover.
The company highlighted its strong financial position with net cash and an investment-grade balance sheet, expressing confidence in its strategy to deliver over £1 billion profit before tax and long-term shareholder value.
It said: “The board notes the highly opportunistic timing when easyJet’s share price is temporarily depressed due to the current situation in the Middle East and its impact on customer confidence and jet fuel prices.
“EasyJet 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 advised shareholders to take no action at this time.
It has been suggested that easyJet’s planes alone may be worth more than its £3 billion stock market listing. The company owns 205 planes outright, alongside 151 leased planes — as well as lucrative take-off and landing slots at Gatwick airport, where it operates more than a third of all flights.
Among the options for Castlelake would be taking control and selling the business to another airline. Castlelake did this when Scandinavian Airlines (SAS) failed. It bailed out the business, then sold on its shares to Air France-KLM.
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