EasyJet and some of its largest investors are demanding at least £600 million more than the bid tabled by U.S. investment firm Castlelake, according to people familiar with discussions cited by the Financial Times.
The airline turned down Castlelake’s publicised offer, which was disclosed earlier in the day and put at about $6.3 billion, saying the proposal did not reflect the value of the business. Castlelake included a partial equity alternative in its approach to investors when it announced the bid.
Significant shareholders have told the FT that they would be willing to engage with Castlelake only if the price rose materially. One large, unnamed investor was quoted as saying, "I think they'll engage if the price is at seven plus," a reference to an offer of at least £7 per share. That level would imply an enterprise valuation for easyJet of roughly £5.3 billion, based on the figures provided.
In response to the limited engagement it said it was receiving, Castlelake issued a statement earlier in the day noting easyJet’s "unwillingness to engage meaningfully" as a factor in the decision to make the bid public. The firm’s offer contained an option for some investors to receive equity rather than cash.
At present, the situation is defined by a notable gap between the price Castlelake put on the table and the level that sizeable shareholders say would persuade them to enter substantive negotiations. The parties cited in the report remain unnamed and the outcome of the discussions is unresolved.
Given the contours reported - a public $6.3 billion proposal, investor demands for at least an additional £600 million, and a reference point of £7 a share equating to a roughly £5.3 billion valuation - the talks appear to hinge on whether Castlelake will raise its offer or whether easyJet and its shareholders will move toward engagement at the current figure. Castlelake’s public statement also made clear the firm views the lack of meaningful engagement as a justification for announcing the approach.
There is no further detail in the reporting about next steps, and the parties involved have not been identified beyond the named suitor and the carrier. For now, the valuation gap and the differing stances over engagement set the terms of an unresolved negotiation.