Easy Jet agrees to be acquired by Keslake for US$7.3 billion, shares surge 10%
EasyJet shares hit a new 52-week high on Monday. The low-cost airline agreed in principle on Sunday to an upgraded takeover bid from U.S. private equity firm Case Lake. An easyJet passenger aircraft is parked on the tarmac at London Southend Airport in Southend-on-Sea, England, Friday, May 3, 2024. The owner of London's Southend Airport has agreed to a debt restructuring plan proposed by the airport, creditors Carlyle Group and Cyrus Capital Partners. British low-cost airline easyJet has accepted in principle a takeover offer worth 5.5 billion pounds (equivalent to $7.3 billion) from U.S. private equity firm Case Lake, sending its shares soaring before the market opened on Monday. The stock rose as much as 10.5% at 8:15 a.m. London time (3:15 a.m. ET), setting a new 52-week high. EasyJet rejected Keslake's £4.93 billion takeover bid last month and the two parties finalized an upgraded privatization proposal on Sunday. This is the fifth time Keslake has made an acquisition offer to easyJet. The new offer is for $6.90 per share in cash. Keslake needs to issue a formal acquisition offer before August 3, otherwise it will abandon the transaction. The global aviation industry is currently under pressure. The conflict in the Middle East has caused aviation fuel supply to be tight, and major airlines are struggling to operate. The International Air Transport Association warned last month that profits for global airlines this year may be cut in half due to a year-on-year surge of about 70% in jet fuel prices. EasyJet released its latest semi-annual report on May 21: In the six months ended March 31, the company's revenue increased by 12% year-on-year to 4 billion pounds, but its pre-tax loss reached 552 million pounds. It also warned of rising ticket prices and slowing bookings. EasyJet and Keslake issued a joint statement on Sunday: "During the negotiation between the two parties, Keslake expressed his high recognition of easyJet and all its employees. If this transaction is successfully completed, the company will assist easyJet in its future development and transformation, build a European airline with stronger strength and higher risk resistance, and protect the rights and interests of all stakeholders." "Keslake supports easyJet's fleet renewal plan and believes that the plan is a core measure for the company to improve its competitiveness, operational efficiency and achieve sustainable development goals in the long term."