British budget airline easyJet agreed in principle on Sunday to a sweetened takeover bid from US investment firm Castlelake, valuing the carrier at up to £5.5 billion ($7.34 billion).
The offer of £6.90 per share represents a 73% premium to easyJet's closing price on May 29, when Castlelake first disclosed its interest to British regulators.
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The deal would take the 31-year-old airline private amid global operating challenges, including higher fuel prices and profit pressure linked to the Iran conflict.
EasyJet operates 355 aircraft across more than 1,200 routes in 38 European countries.
Its recovery since the Covid-19 pandemic has been difficult, though its package holidays business and efficient Airbus fleet remain bright spots.
The airline had long been viewed as a takeover target due to fierce competition with Ryanair and its valuable landing slots at London Gatwick, Paris, and Geneva airports.
EasyJet previously rejected a £4.93 billion proposal from Castlelake in June but allowed limited access to commercial data to continue discussions.
Regulatory Steps Ahead
The current transaction requires Castlelake to submit its final intentions to regulators within the coming weeks.
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EasyJet's board said the offer represents "a value that the Board would be minded to recommend to easyJet shareholders."
Castlelake must submit its firm intention to make an offer by August 3.
Castlelake, a major aircraft lender that has leased planes to about 200 airlines, declined to comment further due to regulatory restrictions.
The firm previously stated it would own 49% of the bidding vehicle to comply with EU majority-ownership rules, with the remainder held by two EU nationals: Mark Breen and former Malaysia Airlines CEO Peter Bellew.
The approach was initially viewed critically by easyJet's management, which called it "highly opportunistic" as the Iran conflict depressed its shares.
Founder Stelios Haji-Ioannou, who left the board in 2010, remains the largest shareholder with roughly a 15% stake held alongside his family.
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The board's decision comes as the British market is on course to set a record for mergers and acquisitions in 2026 due to weaker valuations among London-listed companies.
