EasyJet Rejects $6.27 Billion Castlelake Bid, Citing ‘Cheap’ Valuation and EU Ownership Risks

EasyJet rejected Castlelake’s latest takeover approach on Monday, saying the $6.27 billion proposal still undervalues the airline and was structured too opaquely to win board support. The dispute matters because EasyJet is not a distressed asset, giving the airline enough leverage when it comes to negotiations regarding the purchase.

The BBC reported that the US investment firm had put forward a third proposal valuing EasyJet at £4.74 billion, or about $6.27 billion. However, EasyJet said the offer was “highly opportunistic” and accused Castlelake of trying to buy the carrier “on the cheap.”

Why EasyJet Said No To Castlelake

EasyJet’s board has defended its decision to reject the $6.27 billion offer, stating that the latest proposal remained too low and did not reflect the company’s prospects. Castlelake’s 625p-a-share offer was actually presented as a 24% premium to EasyJet’s last closing price before the bid became public, but EasyJet argued that the premium did not compensate shareholders for the airline’s long-term earnings potential.

To put this in perspective, in its FY25 annual report, the airline said it finished the year with net cash of £602 million, revenue of £10.1 billion, and headline profit before tax of £665 million. In a newer half-year update, EasyJet revealed in its report that it still held adjusted net cash of £434 million as of 31 March 2026. Given the company’s healthy financial standing, the proposed deal would be less like a rescue bid and more like a valuation battle over a profitable European carrier 

The airline also pointed to what it sees as temporary pressure on the share price, including concern across the travel sector after renewed conflict in the Middle East. With the tensions having eased after the United States and Iran reached an agreement, business is expected to pick up. Also, EasyJet is already widely known as a bargain candidate because of its airport slots, fleet stability, and relatively subdued market value compared with peers, putting it in a unique and profitable situation.

Castlelake, for its part, had said it wanted to keep EasyJet under European control and claimed its structure could satisfy EU ownership rules. The firm said it had partnered with former EasyJet chief operating officer Peter Bellew and aerospace executive Mark Breen to create an EU-based control structure. But EasyJet referred to the proposed structure as “opaque” and said it had no basis to judge whether the deal could actually be delivered.

Castlelake And Jumping The Regulatory Hurdle

Despite EasyJet raising low valuations issues, the most important structural issue is not just price, but control of the European airline. Under European Commission rules, an EU carrier must usually be majority-owned and effectively controlled by EU nationals or entities that meet regulatory tests. This is explained by the EU’s rules on ownership and control requirements for EU airlines, which is why Castlelake’s proposal included an ownership vehicle with EU partners.

This seemingly simple requirement by the EU creates execution risk for buyers who are based outside Europe. Due to this, even a financially attractive deal on paper can still fail if regulators conclude that ownership, voting rights, or control rights are not sufficiently clear about whether they will still be within Europe or not.

There is also the issue of strategic risk for EasyJet shareholders. The airline said in its annual report that it is focused on slot-constrained airports, fleet modernization, and its goal of delivering more than £1 billion in pre-tax profit over time. If a deal is to go through, a buyer would need to explain how it could improve those economics without damaging the current business model.

Given the issues outlined above, Castlelake, which is US-based and already commanding a 2.14% stake in EasyJet, has unique problems to deal with. The latest proposal is its third to the airline after prior rejections, which Castlelake says is to help “support EasyJet as a stronger, more resilient European airline under European control, respecting EasyJet's valuable airline assets and continuing to sustain its network."