Budget airline easyJet has branded a possible takeover approach from Castlelake as “highly opportunistic” and confirmed it has not held talks with the US investment fund.
Private credit company Castlelake revealed late on Friday, after the stock market close in London, that it was in the early stages of considering an offer for easyJet, but had not yet approached the firm’s board.
The American firm, which confirmed it owns a stake of around 2.14% in easyJet through shares held on behalf of funds it manages, said on Monday any offer would be for “no less than” 403.23p a share, valuing the airline at a minimum of £3.06 billion.
Shares closed on Friday at 398p each.
The carrier said the takeover interest comes at a time when its share price has been pushed lower by worries over the impact of the Iran war on the airline sector.
EasyJet said on Monday: “The board notes the highly opportunistic timing when easyJet’s share price is temporarily depressed due to the current situation in the Middle East and its impact on customer confidence and jet fuel prices.”
It highlighted its strong financial position and said it remained focused on its medium-term target to deliver more than £1 billion in pre-tax profits.
The Luton-based firm said it also “notes the considerable regulatory, financial and other execution challenges associated with a potential takeover of easyJet”.
But it said it has a duty to maximise shareholder value and would “consider any proposal, should one be made”.
Castlelake has until 5pm on June 26 make a firm offer or walk away under UK takeover rules.
Shares in FTSE 250-listed easyJet surged by up to 12% in opening trade on Monday, although the stock was down by more than 30% in the past year before news of the potential bid.
Led by executive chairman and founder Rory O’Neill, Castlelake and has assets under management worth 36 billion US dollars (£27 billion).
It entered talks in January with bankrupt US carrier Spirit Airlines over a possible takeover.
Castlelake has also previously bailed out collapsed Scandinavian Airlines (SAS) and then sold on its shares to Air France-KLM.
Richard Hunter, head of markets at Interactive Investor, said a swoop on easyJet would “capitalise on a share price which has fallen by 31% over the last year, with the company flitting in and out of the FTSE 100”.
“In addition, easyJet now has the traditionally loss-making first half of its year out of the way, while its holiday business continues to grow at pace, underlining its potential attractiveness,” he said.
In interim results last month, easyJet reported that bookings for summer flights were lower than the same point last year because of uncertainty caused by the conflict in the Middle East.
It posted a half-year pre-tax loss of £552 million, compared with a loss of £401 million a year ago.