Castlelake mulls possible offer for British budget carrier easyJet
Castlelake's Interest and Market Context
Early Stage Considerations
May 29 (Reuters) - U.S.-based investment firm Castlelake, L.P. on Friday said it is in the early stages of considering a possible offer for British budget carrier easyJet, sending the airline's U.S.-traded shares up nearly 10%.
No approach has been made to the board of easyJet and there can be no certainty that any offer will be made, nor as to the terms of any offer, Castlelake said in a statement.
UK Takeover Rules and Timeline
Under UK takeover rules, Castlelake must make a firm offer by June 26 or walk away from a deal.
Market Conditions Impacting easyJet
Uncertain Outlook and External Pressures
The news comes a week after easyJet warned that its full-year outlook remains uncertain as the Iran war drives up fuel costs and bookings weaken for the peak summer season.
Market Capitalisation and Share Performance
The company has a market capitalisation of 3.02 billion pounds, according to data compiled by LSEG. The carrier's shares closed at 398 pence on Friday and are down over 22% this year.
Global Aviation Disruptions
The Iran conflict has been disrupting global aviation, sending jet fuel prices up more than 80% since late February and forcing airlines to raise fares, cut capacity or absorb margin pressure as flows through the Strait of Hormuz are constrained.
Castlelake's Broader Aviation Activities
Previous Acquisition Talks
Castlelake had in January entered talks to acquire Spirit Airlines, months before the bankrupt carrier permanently ceased all flight operations and went out of business.
Aviation Lending Platform
The investment firm last year launched Merit AirFinance, an aviation lending platform backed by $1.8 billion in deployable capital, which aims to provide debt financing to airlines and aircraft lessors for new and used aviation assets.
easyJet's Past Strategic Decisions
Rejected Wizz Air Offer
In 2021, easyJet rejected an offer from rival Wizz Air, opting instead to raise $1.7 billion from shareholders and go it alone in an industry battling to recover from the pandemic.
Additional Information
Exchange Rate
($1 = 0.7429 pounds)
Reporting Credits
(Reporting by Yamini Kalia and Rhea Rose Abraham in Bengaluru, and Kanjyik Ghosh in Barcelona; Editing by Shreya Biswas)
