EasyJet, the U.K.-based budget airline, has agreed to be acquired by Castlelake, a U.S. private equity firm, in a deal valued at £5 billion ($6.7 billion). The board of directors and Castlelake announced their agreement on Sunday after rejecting four earlier bids from the firm. Shares surged nearly 10% Monday on the London Stock Exchange.
The board recommended Castlelake’s £6.90-per-share offer to shareholders, with Castlelake required to submit a formal bid by August 3 or withdraw its proposal. Castlelake has expressed respect for EasyJet and intends to support its growth and fleet modernization program, crucial for the airline’s long-term competitiveness and sustainability.
Founded in 1995 by entrepreneur Stelios Haji-Ioannou, EasyJet quickly grew on low-cost flights across Europe. However, recent challenges like high jet fuel costs due to the Iran war have impacted profits. Castlelake manages about $37 billion in assets and leases planes to hundreds of global airlines.