EasyJet plc has agreed in principle to a £5.5 billion (A$10.6 billion) takeover by United States-based investment firm Castlelake, potentially taking the British low-cost airline private after more than two decades on the London stock market.
The airline said its board would be prepared to recommend a cash offer of £6.90 per share, describing the revised proposal as reflecting a value that shareholders should consider.
The new offer represents a 73% premium to EasyJet's closing price on 29 May when the private equity fund manager first disclosed its interest in the airline to British regulators.
Announcing the agreement in principle on Sunday in a statement, the companies asked for an extension of the deadline to formally complete a deal that followed weeks of negotiations and several rejected offers.
Under British takeover rules, Castlelake has until 3 August to submit a firm offer.
EasyJet plc (LSE: EZJ) closed 20 pence (0.036%) higher at £5.582 pence on Friday, capitalising the company at £4.23 billion (A$8.12 billion).
EasyJet had initially described Castlelake's approaches as "highly opportunistic", but after being granted limited access to commercial and financial information, the U.S. investor returned with an improved proposal that won the board's support.
The transaction values easyJet's equity at about £5.5 billion on a fully diluted basis and would provide a substantial windfall for founder Sir Stelios Haji-Ioannou and his family, who remain the airline's largest shareholders with a stake of about 15%.
The airline was founded in 1995 by Haji-Ioannou and is the second-largest budget carrier in Europe behind only Ryanair.
