EasyJet rises 10.5% after Castlelake lifts takeover bid to £5.5B

EasyJet rose 10.5% shortly after 8:15 a.m. in London on July 6 after agreeing in principle to a £5.5B ($7.3B) takeover bid from U.S. private equity manager Castlelake, according to CNBC.

The move took the U.K. low-cost carrier to a new 52-week high. The size of the bid clears the Tier-1 M&A threshold, and the share reaction also clears the 8% single-stock threshold. CNBC reported that Castlelake's improved proposal came after EasyJet rejected a £4.93B approach last month.

The spread between the earlier £4.93B proposal and the new £5.5B outline agreement gives the market a concrete revision to price: about £570M more headline value before any final terms, financing details, or regulatory conditions. The board's willingness to recommend the improved proposal will be the next gating item for shareholders.

The transaction would take one of Europe's best-known budget airlines private at a time when travel demand, fuel prices, labor costs, and aircraft availability are all affecting airline margins. A private equity owner would have to underwrite fleet spending and route economics while absorbing the cyclicality of European leisure travel.

What matters next is the binding offer document, financing commitments, shareholder acceptance threshold, and any competition review. The market will also compare the £5.5B valuation with EasyJet's earnings recovery and with listed peers in European low-cost aviation.