The new offer at 6.90 pounds a share represents a 73% premium to easyJet’s closing price on May 29, when the private equity fund manager disclosed its interest in the airline to British regulators. Since then, as the takeover talks held ground, the shares went up steeply as well. As per the latest updates, the budget carrier’s shares rose 10% during trading at London, hitting 6.16 pounds.

Castlelake’s successful offer also gives easyJet an equity value of 5.23 billion pounds (USD 6.98 billion), rising to 5.52 billion pounds on a fully diluted basis. The bid is 24% above easyJet’s closing price on Friday (3rd July).

The deal, which would see the American investor take 31-year-old easyJet private, coincides with operating challenges for airlines globally as they grapple with sharply higher ⁠fuel prices and profit pressure due to the Iran war. So severe were the disruptions that they forced budget carrier Spirit Airlines to file for bankruptcy in the United States.

Locked in fierce competition with rival Ryanair, easyJet had long been viewed as a takeover target with its valuable landing slots at airports, including London Gatwick, Paris, and Geneva, which made the entity attractive to potential bidders.

The carrier in June rejected a 4.93 billion pound proposal from Castlelake but signaled an interest in continuing talks by granting the private equity manager limited access to the venture’s commercial data.

On Sunday (July 5), easyJet’s board said that the latest bid was at “a value that the board would be minded to recommend to easyJet shareholders.” However, it has put the ball firmly in Castlelake’s court by asking the latter to submit its firm intention to make an offer by August 3. Castlelake, an established lender to the global aviation sector, apart from leasing airplanes to about 200 airlines, will now have to meet the European Union’s (EU) regulations requiring airlines operating in the bloc to be majority owned and controlled by EU nationals.

“The financial terms of the proposed offer are at a value that the board would be minded to recommend to easyJet shareholders should a firm offer be made,” the company said.

Castlelake, during one of its failed bids, said it would own 49% of the investment vehicle with the remainder held by two EU nationals, former Malaysia Airlines CEO Peter Bellew ⁠and senior industry executive Mark Breen. Bellew was easyJet’s chief operating officer from 2019 to 2022. Breen, on the other hand, runs an aerospace consultancy and has previously held senior roles at a number of airlines, including the ones in the Middle East.

EasyJet, which flies low-cost routes in 38 European countries, operates 355 aircraft across more than 1,200 routes. The business, since the COVID-19 pandemic, has failed to recover financially, despite having bright spots like package holiday business and an efficient Airbus ⁠fleet.

British-Cypriot entrepreneur Stelios Haji‑Ioannou, who established easyJet in 1995, left the board in 2010 but remains the biggest investor with a roughly 15% stake alongside his family.

The British market is on course to set a mergers and acquisitions record in 2026 as weaker valuations among London-listed companies attract buyers. EasyJet initially said Castlelake’s approach was “highly opportunistic” as the Iran war turmoil depressed its shares.

Former aviation executive John Strickland, while interacting with the BBC, has said that in addition to being a “profitable, successful airline,” easyJet also has attractive features like high brand recognition.

“Looking at the business itself, it has a substantial fleet of aircraft, numbering over 350 planes, and a massive order book—aircraft slots on production lines are hard to get your hands on. In addition, they have a very strong slot position at a number of large, congested airports around Europe, including Gatwick and Paris Charles de Gaulle. The most popular slots can be worth tens of millions of pounds when traded between airlines,” Strickland told the BBC’s “Today” program.

He doesn’t see CastleLake slimming down EasyJet’s organizational structures. Castlelake has assets under management worth USD 36 billion (27.3 billion pounds).

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While easyJet has called the timing of Castlelake’s offer “highly opportunistic”, analysts say the company’s low valuation, slots at key airports and stable fleet make it a prime takeover target, as it has struggled to boost ‌its market capitalisation since the COVID-19 pandemic.

While Castlelake said that it was in the early stages of considering a takeover of easyJet that would be over 403.23 pence per share, no ⁠formal approach has been made.

Under British takeover rules, the American investment firm has time until June 26 to make a firm bid or walk away. As per a report from Italian daily Corriere della Sera, Castlelake is looking at MSC, the world’s largest shipping group, as a partner in a consortium for the ‌potential takeover bid.

Switzerland-based MSC, run by Italian billionaire Gianluigi Aponte, is a ⁠global group spanning container shipping, logistics, terminal and inland transport operations, and passenger cruises. MSC also owns a 49% stake in Italian high-speed rail operator Italo.

As per the Corriere della Sera, a combination with easyJet would allow MSC to ⁠control the entire leisure travel chain, from flights to cruise ships, in a model similar to German travel group TUI.

Talking about the rumoured takeover, Chris Beauchamp, chief market analyst at trading platform IG, told Reuters, “Few people can resist a bargain.”

As per Deutsche Bank analyst Jaime Rowbotham, the fact that easyJet’s stocks have been chronic underperformers, compared to industry peers like Ryanair, makes the budget carrier an attractive takeover target to potential suitors.

“EasyJet has ‘looked cheap’ for some time. This latest bid ⁠speculation will likely see a boost again to the easyJet share price,” Rowbotham wrote in a note, adding that other possible attractions for Castlelake could be the carrier’s airline fleet, room to boost margins and efficiency, and the airport slots it commands.

Despite successful holiday business and an efficient Airbus fleet bolstering its results, easyJet has been a known struggler when it comes to growing passenger numbers from its position between low-cost and traditional rivals like British Airways operator AIG. EasyJet, however, has no direct exposure to the Middle East, where flights have been disrupted by the ongoing Iran war.

While easyJet has drawn deal speculation for years due to its slots at airport hubs in ‌London, ⁠Paris and Geneva, that makes it an interesting takeover target for larger aviation players looking to expand their operational footprint.

Barclays’ analyst Andrew Lobbenberg has also cautioned that demand in Europe’s short-haul leisure market has been significantly affected by the Iran war. With easyJet’s fairly low margins and valuation, tough external factors are likely hitting the venture’s profits hard.

Lobbenberg added that while easyJet is Europe’s worst-performing airline stock in 2026, its ⁠assets, including its fleet, slots and holiday business, were undervalued. He estimated them to be worth over 11 pounds per share.

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