EasyJet: a one-way ticket to Minneapolis

EasyJet’s potential sale has moved forward after the carrier agreed in principle to be bought by US private equity investor Castlelake, following four previous overtures that were rejected as “highly opportunistic.” As reported, the improved offer is £6.90 per share in cash, valuing the deal at about £5.5 billion, subject to navigating strict EU rules on airline ownership. The news comes after a month-long siege for the airline, which was founded by Stelios Haji-Ioannou and floated in 2000, and whose shares jumped on the prospect of shareholders staying invested rather than being forced to divest if the company delists. Despite the optimism, some analysts warned that the sale could be “symbolic” of UK corporates being undervalued. Investors are not yet pricing in a final deal, though rival European airline stocks rose on the possibility that easyJet’s fate under a more expansionist owner might be limited. Castlelake says operations would largely continue unchanged.