No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Budget airline EasyJet has rejected Castlelake's third and highest nonbinding proposal as the private equity firm urged shareholders to consider the terms ahead of the 26 June "putup or shutup" deadline.
The 625p per share non-binding proposal, submitted on 20 June, followed earlier proposals at 560p and 600p, both of which were also rejected by the airline's board. Castlelake said it expected the latest offer to prompt engagement but was turned down on 21 June, leading it to disclose the proposal publicly.
Castlelake said the 625p offer represents a 59% premium to EasyJet's undisturbed price on 28 May and a 71% premium to the volumeweighted average price since the carrier's April interim update. The price was also above any closing level since February 2022 and exceeds all analyst targets published since midApril, added the investment firm.
The bidder argued the proposal "substantially derisks" EasyJet's business plan and compares favourably with the airline's mediumterm ambition of generating more than 1bn in pretax profit. A partial equity alternative will also be offered to allow some shareholders to remain invested in a privately-owned EasyJet.
Castlelake said it has structured the deal to comply with EU airlineownership rules and added that it was ready to begin focused due diligence immediately and could move quickly to a firm offer if granted access. However, it stressed that there was no certainty a formal bid will follow.
As of 0820 BST, EasyJet shares were up 2.06% at 514.40p.
Reporting by Iain Gilbert at Sharecast.com
See latest RNS at Investegate
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.