Low-cost carrier EasyJet has reached an agreement in principle with US investment firm Castlelake over a potential takeover valued at approximately £5.2 billion, EDnews reports, via BBC.
Under the preliminary proposal, Castlelake has offered £6.90 per share, a higher price than its four previous bids, which EasyJet had rejected as undervaluing the airline.
The agreement does not constitute a confirmed takeover. Castlelake must still secure regulatory approvals and meet conditions required for the transaction to proceed.
One of the key challenges is compliance with European Union ownership rules, which require EasyJet to remain at least 51% owned and controlled by European interests in order to retain its operating rights. Castlelake has previously indicated it has a plan to satisfy these requirements.
The investment firm has until 3 August to either announce a firm intention to make an offer or formally withdraw its proposal.
EasyJet's board said the financial terms of the latest proposal are at a level that it would be prepared to recommend to shareholders if a formal offer is submitted.
One of Europe's largest airlines, EasyJet operates around 1,200 routes across 35 countries and employs more than 19,000 people. The company has previously attributed weakness in its share price to broader pressures on the travel sector, including geopolitical tensions in the Middle East.
Castlelake manages approximately $36 billion in assets and said it intends to support EasyJet's future growth and strengthen its position as a leading European airline if the acquisition proceeds.
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