EasyJet Takeover Moves Closer as £5.2 Billion Deal Gains Board Support

EasyJet could be on the verge of one of the biggest airline takeovers in recent years after its board signalled it would support a £5.2 billion bid from US investment firm Castlelake.

The Luton-based low-cost airline has reached an "in principle" agreement with Castlelake following months of negotiations, bringing the potential acquisition a significant step closer.

The latest proposal, submitted on 4 July, values easyJet at £6.90 per share, representing Castlelake's fifth attempt to buy the airline after four previous offers were rejected.

easyJet Board Open to Takeover

Since first expressing interest in late May, Castlelake has steadily increased its bid from £5.60 per share to £6.00, £6.25, £6.50, and now £6.90.

For the first time, easyJet's board has indicated the offer is high enough that it would be prepared to recommend the deal to shareholders, provided a formal bid is submitted and all conditions are agreed.

Castlelake already owns a 2.14% stake in easyJet through investment funds it manages.

However, the acquisition is far from complete. The investment firm must still carry out due diligence, finalise legal agreements and secure regulatory approvals before any takeover can proceed.

EU Ownership Rules Remain a Major Hurdle

One of the biggest obstacles is complying with European Union ownership rules, which require airlines operating within the EU to remain at least 51% owned and controlled by European investors.

Castlelake has until 3 August to explain how it plans to meet these requirements before deciding whether to make a formal offer or abandon the deal altogether.

Even if those hurdles are cleared, the acquisition would still require approval from easyJet shareholders.

In a statement, Castlelake said it has "tremendous respect for easyJet and its people" and believes it can support the airline's long-term resilience and future growth.

Who Is Castlelake?

Headquartered in Minneapolis, Castlelake is a global investment firm managing approximately $36 billion (£27.3 billion) in assets across aviation, real estate, consumer finance and corporate credit.

Although not widely known outside investment circles, Castlelake has become one of the aviation industry's largest aircraft leasing companies.

Its portfolio includes around 375 aircraft, leased to airlines including Etihad Airways, Qantas, Air India Express, Frontier Airlines and Mexico's Viva. More than a quarter of those aircraft are operated by European airlines.

Since launching in 2005, the firm has invested in more than 900 aircraft, regularly buying, leasing and selling aviation assets. In 2024, it sold a $5 billion aircraft portfolio to aircraft leasing giant Avolon.

Why Does Castlelake Want easyJet?

Industry analysts believe easyJet represents an attractive long-term investment thanks to its valuable aircraft, strong financial performance and dominant position in the European aviation market.

The airline owns around £5 billion worth of assets, including a large fleet of next-generation Airbus A320neo aircraft. Unlike many rival airlines, a significant proportion of these aircraft are owned outright rather than leased, making them valuable assets that could be sold or leased to generate returns.

Former aviation executive John Strickland told the BBC that he does not expect Castlelake to dramatically restructure the airline if the takeover succeeds. Instead, he believes easyJet's appeal lies in its profitable business model, strong brand recognition and fleet of more than 350 aircraft, alongside a substantial pipeline of future aircraft orders.

With global aircraft production struggling to keep pace with demand, securing new delivery slots has become increasingly difficult, making easyJet's existing and future fleet particularly valuable.

Another major attraction is the airline's portfolio of take-off and landing slots at some of Europe's busiest airports, including London Gatwick and Paris Charles de Gaulle.

According to industry analyst Robert Boyle, those airport slots alone could be worth an estimated £500 million, further strengthening the airline's appeal to investors.

What Happens Next?

The coming weeks will determine whether Castlelake can overcome the regulatory challenges and convert its "in principle" agreement into a formal takeover offer.

If successful, the deal would mark one of the most significant changes in European aviation ownership in recent years and could shape the future direction of one of the UK's largest low-cost airlines.