EasyJet’s board has rejected a fourth takeover proposal from its US suitor Castlelake and has been granted a nine-day extension to the deadline for a firm offer to emerge.
Castlelake’s latest proposal, made on Tuesday, is 650p per share in cash, including a partial shares alternative. The US investment fund said it hopes to further improve its value following access to limited commercial information.
The bidding vehicle would be owned 49% by Castlelake and certain co-investors, including Brookfield Asset Management, and 51% by EU nationals including Peter Bellew and Mark Breen.
Having carefully reviewed it with its advisers, the board of easyJet decided to regard the proposal as “substantially undervaluing the company and its prospects and continuing to give rise to significant questions of deliverability”.
However, the board said that giving Castlelake access to limited commercial information, as Castlelake sought, might produce a more attractive proposal “that better reflects the value of easyJet and its prospects and the interests of shareholders”.
EasyJet’s board said it continues to be concerned about the ownership structure and deliverability of any offer from Castlelake, and the time it will take, with the consequent meaningful impact on the present value of the offer price, to satisfy necessary conditions.
The board has informed Castlelake that it would expect satisfactory assurances and commitments in these regards.
The new “put up or shut up” deadline is now 5pm on 5 July.
EasyJet said it 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”
The board said it “remains highly confident in easyJet’s strategy and its ability to deliver attractive long-term value for shareholders. The C=company remains focused on executing its medium-term target of delivering greater than £1 billion profit before tax.”
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