Castlelake, L.P. confirmed it is considering a possible offer for British budget airline easyJet, sending the airline's stock up as much as 10% on Monday.
The Minneapolis-based investment firm said on May 29 that it was in early stages of evaluating a potential bid, and has not approached easyJet's board. In a follow-up announcement on June 1, Castlelake disclosed it already holds 16,241,494 ordinary shares of easyJet — roughly 2.14% of the airline's issued ordinary share capital — and said any offer would be valued at no less than 403.23 pence per share. At that minimum price, easyJet's total equity would be worth roughly £3.06 billion ($4.12 billion) — a premium of 1.3% over the 398 pence per share at which the stock closed on Friday, The Wall Street Journal reported.
EasyJet said it had not received any proposal from Castlelake and was not in any talks, according to The Wall Street Journal.
Under U.K. takeover rules, Castlelake must by June 26 either announce a firm intention to make an offer or declare that it does not intend to proceed. There can be no certainty that any offer will be made, the firm said.
Analysts said easyJet's depressed valuation makes it an attractive acquisition target. Shares in the carrier have shed roughly 15% in 2026 and trail rivals such as Ryanair, making it an appealing target for potential buyers, Reuters reported. The airline has struggled to grow its passenger numbers and market capitalization since the Covid-19 pandemic.
Among the factors that could draw buyer interest, Deutsche Bank's Jaime Rowbotham cited in a research note the airline's fleet, scope for margin and efficiency gains, and its commanding positions at gateway airports including London, Paris, and Geneva, Reuters reported. Barclays' Andrew Lobbenberg put a value of more than £11 per share on the sum of easyJet's parts — covering the fleet, slot portfolio, and holiday division — arguing those assets are currently underappreciated by the market, Reuters noted.
The aviation industry more broadly has felt the pressure of higher fuel prices since the Iran war broke out in late February, though easyJet operates no routes into the Middle East region where the fighting has disrupted air travel, Reuters reported.