An EasyJet passenger plane on the runway at London Southend Airport in Southend-on-Sea, UK, May 3, 2024.
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EasyJet Shares rose sharply in early deals on Monday after the British budget carrier agreed in principle to a 5.5 billion pound ($7.3 billion) takeover offer from US private equity manager Castlelake.
Shares of the budget airline rose 10.5% shortly after 8:15 a.m. in London (3:15 a.m. ET)., hit a new 52-week high.
Castlelake’s enhanced plan to take EasyJet private, which was agreed on Sunday, comes after the carrier rejected a £4.93 billion offer from a private equity firm last month. Castlelake made five bids for EasyJet in total.
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EasyJet.
The new offer is a cash offer of $6.90 per share. Castlelake now has until August 3 to make a firm offer or walk away from the deal.
The proposal comes at a time of stress for the global aviation sector as airlines face jet fuel shortages caused by conflict in the Middle East. The International Air Transport Association warned last month that global airline profits could halve this year due to rising jet fuel prices, which are expected to be about 70% higher than last year.
In its latest half-year report, published on May 21, EasyJet reported a pre-tax loss of £552 million for the six months ended March 31, despite a 12% jump in half-year revenue to £4 billion, warning of rising prices and a slowdown in bookings.
EasyJet and Castlelake said in a joint statement on Sunday: “Throughout discussions between the parties, Castlelake has emphasized its enormous respect for easyJet and its people, and its commitment to supporting its future growth and transformation into a stronger and more resilient European airline for the benefit of all stakeholders if the transaction is completed.”
“Castlelake supports easyJet’s fleet modernization program, which it views as central to the company’s long-term competitiveness, efficiency and sustainability.”
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