Easyjet Plc (LON:EZJ) has received three non-binding indicative proposals from Castlelake, L.P. to acquire the entire issued and to be issued share capital of easyJet.
Castlelake’s first non-binding indicative proposal was submitted in a letter dated 12 June 2026 at an offer price of 560 pence in cash for each easyJet share. The First Proposal was rejected by the easyJet Board on 16 June 2026.
Castlelake submitted a second non-binding indicative proposal in a letter dated 17 June 2026 at an offer price of 600 pence in cash for each easyJet share. This Second Proposal was designed to facilitate prompt engagement from the easyJet Board. The easyJet Board rejected the Second Proposal on 20 June 2026.
Castlelake submitted a third non-binding indicative proposal in a letter dated 20 June 2026 at an offer price of 625 pence in cash for each easyJet share. As with the Second Proposal, Castlelake expected that the Third Proposal would elicit prompt engagement from the easyJet Board. However, the easyJet Board rejected the Third Proposal on 21 June 2026.
Following the rejection of three proposals by the easyJet Board, and given its unwillingness to engage meaningfully, Castlelake is announcing this Third Proposal to enable easyJet shareholders to consider its merits and provide their views on the Third Proposal to the easyJet Board ahead of the upcoming “Put-up or Shut-up” deadline at 5.00 pm (London time) on 26 June 2026.
Third Proposal at 625 pence per easyJet share in cash
The Third Proposal offers compelling value to easyJet shareholders and represents:
· a premium of approximately 59% to the easyJet share price of 394.20 pence per share as at the close of business on 28 May 2026, being the last day before Castlelake’s interest in easyJet became public;
· a premium of approximately 71% per cent to the volume weighted average easyJet share price of 365.42 pence per share from 16 April 2026 (being the date that easyJet published its interim trading update for the six months ended 31 March 2026) until the Undisturbed Date;
· a premium of 35% to the closing easyJet share price of 464.00 pence per share on 27 February 2026, being the last trading day prior to the outbreak of the US-Iran conflict;
· a premium of approximately 39% to the 12-month volume weighted average easyJet share price of 449.50 pence per share as of the Undisturbed Date;
· a price above any closing easyJet share price since 25 February 2022;
· a price above all research analyst price targets published since 16 April 2026; and
· a price to 2027E earnings per share multiple of 16.5x.
In addition, for easyJet shareholders, the Third Proposal substantially de-risks the execution of the Company’s business plan. By way of illustration, Castlelake estimates that its Third Proposal of 625 pence per easyJet share compares favourably to the net present value of easyJet’s share price, even assuming easyJet were to achieve its aspirational target of delivering greater than £1 billion profit before tax in the medium-term and were to trade between its 5-10 year average trading multiple.
Castlelake also intends to offer a partial equity alternative to allow easyJet shareholders to remain invested in easyJet as a privately held business in partnership with Castlelake, subject to a maximum equity participation limit and limitations on transferability.
If easyJet announces, declares or pays any dividend or any other distribution or return of value to shareholders after the date of this announcement, Castlelake reserves the right to make an equivalent reduction to the Third Proposal.
EU Ownership Requirements, Other Regulatory Approvals and Financing
As a long-term investor with two decades of experience in Europe, Castlelake respects the form, spirit and importance of the EU ownership requirements.
Castlelake also has great respect for easyJet’s position as an established, leading airline that serves millions of people across Europe and for the important role it plays in affordable air travel. The Third Proposal includes details of ownership and governance structures designed to ensure responsible stewardship of easyJet.
Castlelake’s ambition is to support easyJet as a stronger, more resilient European airline under European control, respecting easyJet’s valuable airline assets and continuing to sustain its network, serve the passengers who depend on them and enable future growth. Castlelake is committed to working constructively with employees, regulators and government, and to being transparent about its intentions throughout this process.
Castlelake has presented deliverable proposals to the easyJet Board. It has partnered with Peter Bellew and Mark Breen as EU national individual investors. Peter and Mark are experienced executives who have successfully held senior positions in airlines, including European Low-Cost-Carriers. The Third Proposal includes these EU national partners investing and participating in the proposed acquisition of the Company through their ownership and control of an EU company (the “EU Partner”). This EU Partner will hold a controlling shareholding in the overall structure. The EU Partner will at all times be owned and controlled by EU nationals. This proposed structure is consistent with structures adopted by a number of other European airlines that are subject to the same EU ownership rules as the Company. Castlelake is confident that this is a clear, deliverable solution to ensure compliance with all applicable regulatory requirements.
Castlelake has assessed the transactional regulatory filings that will apply to the proposed transaction, including antitrust, foreign investment controls and the EU Foreign Subsidies Regulation. Castlelake is highly confident that the transaction will be structured and completed in full compliance with all applicable regulatory requirements, with any required formal approvals obtained swiftly. Castlelake’s Third Proposal is expected to be fully funded through a combination of committed equity and debt facilities. The committed equity financing will come from funds managed or advised by Castlelake and will comprise a combination of existing Castlelake commitments and commitments from a small number of co-investors, as well as the EU Partner. In addition, Goldman Sachs has indicated that they are highly confident of being able to arrange the required debt financing.
Following completion of any acquisition, easyJet would remain well-capitalised, with a robust capital structure and ample liquidity. The post-acquisition company would retain the necessary financial flexibility and capacity to support its ongoing operations and continue investing in its core business and growth opportunities.
Timeline
Castlelake has already performed an extensive review of publicly available information regarding easyJet. As a result, Castlelake’s proposed due diligence exercise will be focused, and Castlelake is ready to begin that diligence exercise as soon as possible. Castlelake is well-positioned to make a firm offer announcement pursuant to Rule 2.7 of the Code on an expedited basis upon receiving access to due diligence information.
The Third Proposal is subject to satisfaction or waiver of a number of customary pre-conditions, including the completion of satisfactory due diligence and the agreement of definitive transaction documentation. The intention would be to implement the Third Proposal by way of a scheme of arrangement, subject to Castlelake retaining the ability to switch to a contractual offer.
Other Matters
Pursuant to Rule 2.5 of the Code, Castlelake reserves the right to vary the form and/or mix of the consideration described above in this announcement. Castlelake reserves the right to make an offer for easyJet on less favourable terms than the form described above in this announcement, and/or not to offer any partial equity alternative:
(i) with the agreement or recommendation of the easyJet Board;
(ii) if a third party announces a firm intention to make an offer for easyJet on less favourable terms than contemplated under the terms of the Third Proposal; or
(iii) following the announcement by easyJet of a Rule 9 waiver transaction pursuant to Appendix 1 of the Code or a reverse takeover (as defined in the Code).
This announcement does not amount to a firm intention to make an offer under Rule 2.7 of the Code. There can be no certainty that any firm offer will be made for easyJet.
Castlelake has been informed that Peter Bellew acquired interests in aggregate of 50,000 ordinary shares in the Company (approximately 0.007% of the issued share capital of the Company) in a series of transactions from 2 March 2026 to 20 May 2026 (the “Share Acquisitions”). The highest price paid for these Share Acquisitions was 437.14 pence per Company share. Accordingly, further to Rule 2.4(c)(iii) and Rule 6 of the Code, if Castlelake were to make an offer for easyJet, such offer must be at no less than 437.14 pence per Company share.
In accordance with Rule 2.6(a) of the Code, Castlelake is required, by not later than 5.00 pm (London time) on 26 June 2026, either to announce a firm intention to make an offer for easyJet in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.
A further announcement will be made as and when appropriate.
