EasyJet rejects sweetened £4.9bn takeover approach

(Sharecast News) - EasyJet has rejected a fresh �4.9bn approach from US suitor Castlelake, the budget carrier confirmed on Thursday, but agreed to enter discussions.

EasyJet said it had received a sweetened 650p per share indicative proposal, which includes a partial alternative for shareholders to elect for unlisted, non-transferrable, non-voting shares in a vehicle within Castlelake's proposed structure.

It is a 25p increase on its last approach, which valued the business at �4.7bn. However, the airline said the proposal - the fourth from the investment firm - continued to "substantially" undervalue the business. It also flagged "significant questions of deliverability".

As a result, it rejected the approach. However, it has agreed to talks and has given Castlelake more time to access "limited" commercial information, in the hope it may lead to an increased offer.

It said: "The board 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."

Castlelake has until 1700 BST on 5 July to make a firm offer or walk away, after the so-called put up or shut up deadline was extended.

The FTSE 250 carrier concluded: "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.

"The board remains highly confident in easyJet's strategy and its ability to deliver attractive long-term value for shareholders."

EasyJet is one of Europe's largest airlines, and last year carried more than 90m passengers.

Castlelake has yet to comment.

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