easyJet’s Board Backed A Takeover Deal. Its Stock Is Soaring.

easyJet shares surged in London after the airline agreed in principle to an improved takeover proposal from U.S. investment firm Castlelake valued at about $7.3 billion. The stock reached a 52-week high as investors reacted to the revised cash offer and extended timeline for a formal bid.

The offer stands at $6.90 per share in cash, following a series of earlier proposals that were rejected by the airline’s board. Castlelake has now made five approaches in total. According to CNBC, the company has until Aug. 3 to either finalize a binding offer or step away from the deal after reaching an agreement in principle with easyJet’s board.

Market reaction was immediate, with easyJet’s shares climbing sharply in early trading as investors assessed the revised valuation and structure of the offer. The rally followed months of volatility in airline stocks driven by cost pressures and shifting travel demand.

The broader aviation sector has been under strain from rising jet fuel costs and geopolitical uncertainty. According to Reuters, European equities were broadly stable but airline stocks advanced, with easyJet among the top movers after news of the improved bid. The report said investor sentiment was supported by renewed deal activity across the region and improving risk appetite in cyclical sectors.

In its most recent half-year results for the six months to March 31, easyJet reported a pre-tax loss of about $735 million, even as revenue rose 12% to roughly $5.3 billion. The airline said higher fuel costs and softer booking trends weighed on performance, while also noting pricing adjustments across its network.

Earlier reporting also indicated that Castlelake had repeatedly returned with improved proposals as it sought access to easyJet’s books. The airline had previously described earlier approaches as opportunistic, citing depressed valuations linked to fuel inflation and geopolitical uncertainty affecting travel demand.

In a joint statement, both companies said Castlelake has expressed support for easyJet’s fleet modernization programme and ongoing efficiency initiatives. The statement also highlighted the investor’s intention to back the airline’s long-term operational improvements if the transaction proceeds.

According to This is Money, easyJet has faced pressure from higher fuel bills and disrupted travel conditions, while also becoming a target for acquisition interest from major investment groups during a period of share price weakness earlier in the year.