EasyJet has rejected a £4.74billion takeover bid from a US investment firm, arguing the offer significantly undervalues the airline.
The budget carrier accused the bidder of trying to buy the company "on the cheap" after receiving a series of approaches in recent months.
The Luton-based airline confirmed it had turned down a £4.74billion proposal from American investment fund Castlelake, describing the offer as "highly opportunistic" and not in the best interests of shareholders.
The company said the bid had been made at a time when its share price was temporarily depressed and failed to reflect its long-term prospects.
"The board believes that the third proposal represents an opportunistic attempt to acquire easyJet 'on the cheap' and that it is therefore not in the best interests of easyJet shareholders," the airline said.
Castlelake made its approach public on Monday after EasyJet rejected the proposal, sending shares in the airline up around three per cent in morning trading.
The investment fund has now made three separate attempts to buy the company.
Its first two proposals valued EasyJet shares at 560p and 600p respectively, before submitting a third offer worth 625p per share on June 20.
EasyJet's board rejected the latest bid the following day.
"The board of easyJet carefully considered the third proposal with its advisers and concluded that it is highly opportunistic, delivered against the backdrop of easyJet's temporarily depressed share price, and still fundamentally undervalues easyJet and its prospects," the company said.
The investment fund has now made three separate attempts to buy the company
| GETTYThe airline remains adamant that the offer fails to reflect the true value of the business and its future growth potential.
Castlelake chose to publicise its rejected bid directly to shareholders, claiming the carrier has refused to engage "meaningfully" with its advances.
The takeover panel has set a put-up-or-shut-up deadline of 5pm on June 26, requiring Castlelake to either formalise its offer or withdraw.
EasyJet attributed the timing of Castlelake's approach to its share price being temporarily suppressed by concerns over the Iran war's impact on the aviation sector.
The airline's shares had fallen approximately 30 per cent over the preceding twelve months
| GETTYPrior to news of the takeover interest emerging, the airline's shares had fallen approximately 30 per cent over the preceding twelve months.
Despite this decline, the carrier emphasised its robust financial standing and reiterated its commitment to achieving more than £1billion in pre-tax profits as a medium-term objective.
Castlelake argued its 625p offer represented "compelling value", pointing to a premium of roughly 59% above the 394.20p closing price on May 28 — the day before its interest in EasyJet became publicly known.
The airline, however, maintains this comparison exploits an artificially low baseline caused by external geopolitical factors.
Castlelake currently holds a stake of around 2.14% in EasyJet through funds it manages, and decided to take its proposal directly to shareholders after accusing the board of refusing meaningful engagement.
"Following the rejection of three proposals by the easyJet board, and given its unwillingness to engage meaningfully, Castlelake is announcing this third proposal to enable easyJet shareholders to consider its merits and provide their views on the third proposal to the easyJet board," the fund stated.
EasyJet raised concerns about the proposed ownership structure, describing it as "opaque" — with Castlelake holding 49 per cent and the remaining 51 per cent controlled by EU nationals and undisclosed investors.
The fund, led by executive chairman Rory O'Neill and managing $27.3billion in assets, has previous aviation experience, having rescued collapsed Scandinavian Airlines before selling its stake to Air France-KLM.