Airline’s £1bn profit target intact after deal

In a commentary published July 7, The Guardian’s Nils Pratley argued that easyJet’s board, led by Chair Sir Stephen Hester, surrendered too easily to Castlelake’s pursuit, accepting a final price of £6.90 per share without mounting a proper fight. The piece described the board’s stance as “timidity” after earlier branding Castlelake’s lower offers as attempts to grab the business “on the cheap.”

The takeover saga began in June when Castlelake made a series of approaches. EasyJet’s board rejected three initial offers as fundamental undervaluations, including a 625p-per-share proposal. A fourth offer at 650p per share was dismissed in softer terms as a “substantial” undervaluation before an agreement in principle was reached July 5 at 690p.

The Guardian column noted that easyJet’s financial position was not weak. The airline increased pre-tax profits by 46% to £665m in the two years to September 2025, has a solid balance sheet, and maintains a medium-term plan to reach £1bn in profitability — a target the board had previously cited as intact despite delays from the Iran conflict and rising jet fuel costs. EasyJet’s holidays business, built from scratch, hit its profit target of £250m early, the column said.

The analysis also highlighted easyJet’s asset base. The airline owns 208 aircraft outright, has aircraft on order at a time of constrained supply from Airbus and Boeing, and holds an enviable collection of landing slots at in-demand airports, notably Gatwick. City analysts estimated the airline’s asset value at 600p-650p per share, the column noted.

EasyJet’s share price stood at 464p on the day before the Iran conflict broke out, which depressed all airline stocks, but had traded at 586p just 13 months earlier, according to the column. The piece argued that achieving the £1bn profit figure and continuing growth could return the share price to 700p and beyond.

The column noted one additional risk: regulators could object to Castlelake’s plans to bypass European Union ownership rules requiring easyJet to remain majority-owned by European entities. The market price of around 600p reflected that risk, the analysis said.

Castlelake has until 3 August to make a firm offer or walk away under the terms of the agreement.