American financial sirens will have ultimately overcome easyJet's resistance to a US investment fund acquiring a stake in its capital. On Friday, 3 July, at the close of business, easyJet announced it had reached an agreement in principle with the US investment firm Castlelake on a takeover plan valuing the airline at approximately £5.2 billion (€6.07 billion). easyJet had previously rejected Castlelake's proposals on four occasions, even going so far as to deem them contemptuous relative to the low-cost airline's potential.
For the record, the airline would allow it to assert control over a significant part of European air transport. easyJet indeed operates nearly 1,200 routes in 35 European countries and employs 18,000 people.
The airline's board of directors has indicated that it would be willing to recommend the offer to shareholders if Castlelake lodged a firm offer. The latest proposal values easyJet at £6.90 per share.
Castlelake is no stranger to easyJetThe US investment group already holds approximately 2,14 % of easyJet's capital.
In a statement, easyJet indicated that the financial terms of the proposal were at a level the board would be prepared to recommend, subject to the submission of a firm offer.
The orange and white company also specified that Castlelake had expressed "immense respect" for easyJet, its staff and its strategy, while affirming its intention to support its growth and transformation to make it a stronger and more resilient European airline.
A role for Air France-KLM?
However, this agreement in principle does not mean that the takeover is a done deal. Castlelake still needs to obtain the necessary regulatory approvals and present a firm offer before 3 August. If this hurdle is cleared, the proposal will also have to be approved by shareholders.
One of the main obstacles, however, remains the European regulations on airline ownership. As a European carrier, easyJet must remain at least 51 % owned and controlled by European interests in order to retain its operating rights within the European Union. Castlelake is reported to have already put forward a plan designed to meet this requirement.
It is perhaps on this legislative aspect that the Air France group could play a role. Air France-KLM is not currently preparing a takeover bid for easyJet, but the airline group declared itself, during a previous bid by Castlelake, very open to a potential collaboration. Its CEO, Ben Smith, indicated that he would be prepared to discuss easyJet's assets if the American private equity firm Castlelake wished to involve Air France-KLM in a consortium.
