EasyJet shares soar 10% as budget airline agrees to $7.3 billion Castlelake takeover

Key PointsEasyJet shares hit a new 52-week high on Monday.The low-cost airline on Sunday agreed in principle to an improved takeover bid from U.S.

private equity outfit Castlelake.In this articleEZJ-GBFollow your favorite stocksCREATE FREE ACCOUNTEasyJet passenger aircraft on the tarmac at London Southend Airport in Southend-on-Sea, U.K.

, on May 3, 2024.Bloomberg | Getty ImagesEasyJet shares took off in early dealmaking Monday after the U.K.

low-cost carrier agreed in principle to a £5.5 billion ($7.3 billion) takeover bid from U.

S. private equity manager Castlelake.The budget airline was up 10.

5% shortly after 8:15 a.m. in London (3:15 a.

m. E.T.)

, hitting a new 52-week high.Castlelake's improved plan to take EasyJet private, which was agreed on Sunday, comes after the carrier last month rejected a £4.93 billion proposal from the private equity firm.

Castlelake has made five bids for EasyJet in total. Stock Chart IconStock chart iconEasyJet.The new bid represents a cash offer of $6.

90 per share. Castlelake now has until Aug. 3 to make a firm offer or walk away from the deal.

The offer comes amid a period of stress for the global aviation sector, as airlines navigate a jet fuel squeeze caused by the conflict in the Middle East. The International Air Transport Association last month warned that global airlines could see their profits halved this year due to rising jet fuel costs, which are expected to be about 70% higher year-on-year.In its latest half-year earnings, published May 21, EasyJet reported a pre-tax loss of £552 million for the six months ending March 31, despite a 12% jump in half-year revenues to £4 billion, warning of price rises and slower bookings.

EasyJet and Castlelake said in a joint statement on Sunday: "In discussions between the parties, Castlelake has emphasised its tremendous respect for easyJet and its people, along with its intention to support its future growth and transformation to a stronger, more resilient European airline for the benefit of all stakeholders if the transaction proceeds to completion.""Castlelake is supportive of easyJet's fleet modernization program, which it regards as central to the Company's long-term competitiveness, efficiency and sustainability objectives."This is breaking news.

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