British budget airline EasyJet has agreed in principle to a £5.5 billion ($7.3 billion) all-cash takeover by U.S. private credit firm Castlelake, marking the latest in a wave of foreign acquisitions targeting undervalued UK-listed companies. EasyJet shares surged over 10% on Monday to a new 52-week high of 617p, after the board accepted the fifth and sweetened bid from Castlelake, which first approached the carrier on May 29 with a 560p per share offer.
The agreed price of 690p per share represents a 20% premium to the pre-announcement level. The two companies have extended the “put up or shut up” deadline to August 3, giving Castlelake until then to formalize the offer or withdraw. In a joint statement, Castlelake said it “intends to support the company’s future growth and transformation,” and backs EasyJet’s fleet modernization.
However, analysts at Bernstein suggested Castlelake—a major aircraft leasing firm rather than a traditional buyout group—may be planning to break up EasyJet and sell its valuable assets, including a modern Airbus A320 fleet and prime airport slots in London, Milan, and Geneva. Such a move could tighten intra-European aircraft supply, benefiting rivals like Jet2, whose shares rose nearly 4%.
EasyJet has been under financial pressure, posting a pre-tax loss of £552 million for the six months to March 31, as rising jet fuel costs linked to Middle East tensions squeezed margins. The deal comes amid a record year for UK M&A: the value of takeover offers for UK companies surpassed $231 billion in 2026, up over 210% year-on-year, with foreign buyers accounting for 86% of that total. A persistent valuation gap between UK and US equities—UK stocks trade at around 18 times earnings compared to 26.5 for US peers—is driving the acquisition spree, with fund managers warning that Britain’s public equity market is shrinking at an alarming pace.
