easyJet PLC (LSE:EZJ) shares climbed 5.5% to 569p, near a one-year high, after the airline rejected a fourth takeover proposal from US private equity firm Castlelake but agreed to provide limited due diligence access.
The budget carrier said the San Francisco-based firm “hopes to be able to further improve its value following access to limited commercial information”.
The latest proposal, valuing easyJet at 650p per share, was submitted on Tuesday and follows a previously disclosed 625p approach made public earlier in the week. It also includes a partial alternative allowing shareholders to receive unlisted, non-transferable, non-voting equity in the acquisition vehicle instead of cash.
The offer represents a significant premium to the 392.4p “undisturbed” share price at the end of May, though only around 10% above highs seen last summer.
Under the proposed structure, the bidding consortium would be 49% owned by Castlelake and co-investors including Brookfield Asset Management (TSX:BAM, NYSE:BAM), with the remaining 51% held by EU nationals, including former easyJet and Ryanair executive Peter Bellew and aviation investor Mark Breen.
However, easyJet’s board said the fourth proposal “continues to substantially undervalue the company and its prospects” and raised concerns over deliverability, ownership structure, and regulatory timelines.
Directors have previously argued that Castlelake is attempting to acquire the airline at an undervalue, pointing to strong underlying performance, including 46% profit growth over the past two years and a medium-term target of at least £1 billion in annual profit.
The UK Takeover Panel has extended Castlelake’s “put up or shut up” deadline by nine days to 5 July, giving the firm more time to either make a firm offer or walk away.
easyJet shares had fallen to four-year lows in March and April amid concerns over rising jet fuel costs and uncertainty linked to the Iran conflict, which weighed on booking patterns and widened first-half loss expectations.
Analyst Chris Beauchamp at IG said the deadline extension has been interpreted by markets as a sign that a deal remains possible, with investors anticipating a potential improved offer, helping support recent share price strength.
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