Easyjet notes ‘highly opportunistic timing’ as Castlelake weighs bid

Easyjet has fired back at speculation of a takeover, after reports emerged that private credit firm Castlelake was weighing a bid.

The budget airline said it notes the “highly opportunistic timing” of a potential offer as it asserted its share price is “temporarily depressed due to the current situation in the Middle East and its impact on customer confidence and jet fuel prices”.

Shares in the package holiday provider are down some 20 per cent since the beginning of the year to 396.10p, after the travel industry took a major knock on the back of global disruptions from the US-Iran war.

Easyjet was forced to issue a profit warning in April after its operations were hit by the conflict and soaring oil prices – triggered by the closure of the Strait of Hormuz – hiked costs.

The London-listed firm said it had to buy near 18 per cent of its fuel in March at a time when oil prices were elevated. This alone added an extra £25m hit to the firm’s bottom line.

In the first half of the year, Easyjet made a £552m loss.

Castlelake has said, as per Takeover code, due to it owning around 2.14 per cent of Easyjet’s issued share capital it would be required to make an offer at “no less than” 403.23p per share.

Castlelake confirms interest but is yet to approach Easyjet board

On Monday, Easyjet said it was “clear in its duty of aiming to maximise shareholder value and will consider any proposal, should one be made”.

But Castlelake has confirmed that, whilst it was considering a bid, it has yet to approach the board of the airline.

“There can be no certainty that any offer will be made, nor as to the terms of any offer,” the Minneapolis-based investor said.

Castlelake holds $36bn in assets under management and was founded in 2005 by managing partners Rory O’Neill and Evan Carruthers.

It maintains a focus on asset-based private credit, particularly in aviation and speciality finance.

The circling of Easyjet comes as the aviation industry grapples with a crunch to its bottom line.

Budget airline Wizz Air was pounced on by shortsellers after it isssued a profit warning of its own over disruption caused by the Iran war.

The Hungarian airline – which is listed on the FTSE 250 – became the UK’s most shorted company after stating it expects to take a €50m hit from the disruption caused by the war, leaving it likely to make a loss this year given previous guidance of between a €25m loss and a €25m profit.