EasyJet board backs £5.5 billion Castlelake takeover after rejecting four earlier bids

The deal

EasyJet and Castlelake announced on Sunday that they had reached an agreement in principle on a takeover, with the US firm offering £6.90 per share. The bid values the Luton-based airline at up to £5.5 billion on a fully diluted basis, or £5.2 billion undiluted. The easyJet board said the price was "at a value that the board would be minded to recommend to easyJet shareholders" should a formal offer be tabled.

In connection with the fifth proposal, Castlelake has confirmed that it would agree to a 'best endeavours' commitment in any cooperation agreement to obtain any regulatory clearances and approvals required to consummate the transaction.

The pursuit

Castlelake first disclosed its interest on 29 May 2026, when easyJet shares were depressed by concerns over the Iran conflict's impact on aviation. The airline rejected four earlier proposals, calling the initial approach "highly opportunistic". The bids rose from £5.60 to £6.00, £6.25 and £6.50 per share, with the board dismissing the last as "cheap". After the fourth rejection on 25 June, easyJet agreed to share internal data and set a 5 July deadline, which led to the final £6.90 offer.

Market reaction

EasyJet shares jumped more than 10% in early London trading on Monday, reaching their highest level since 2022. The broader travel and leisure sector gained 1%, helping the pan-European STOXX 600 index hold steady at 652.84 points after its strongest week since mid-May. The rally was supported by easing Middle East tensions and oil prices falling close to pre-conflict levels.

Regulatory hurdles

Castlelake, which already holds a 2.14% stake via its funds, must now navigate EU ownership rules requiring 51% of a European airline's capital to be held by European entities. The firm has committed to using best endeavours to secure all necessary clearances. JPMorgan analyst Harry Gowers noted that the agreed ownership and control structure must satisfy both company boards and competition authorities, while Bernstein's Alex Irving suggested the US investor could later split the business into its fleet, slots and holiday operations.

What's next

Castlelake has until 3 August to make a firm bid or walk away under UK takeover rules. A formal offer would then be put to a shareholder vote. The deal, if completed, would add easyJet to a string of recent overseas takeovers of British companies, following Tate & Lyle, William Hill owner Evoke and Intertek. EasyJet employs more than 19,000 people and operates over 350 aircraft on more than 1,200 routes across 37 countries.