EasyJet’s board has surrendered too easily to US bidder

The company’s target to hit £1bn profitability is intact. Why isn’t the board putting up a proper fight? Some foreign takeover swoops on UK listed companies are easier to swallow than others. Sometimes it is hard to mount an argument that shareholders should stick to the virtuous path of independence and say no to an offer of hard cash at a fat premium. The current £10bn bid for Intertek , the FTSE 100 product testing and quality inspection firm that had been going sideways for a while, probably falls into that category. The bid premium on that one was about 60%. EasyJet, on other hand, looks a case of a board giving up before it has put up a proper fight. The story so far at the budget airline is that three non-starter offers from Castlelake, a US private investment firm that is big in aircraft financing and leasing, were rejected in the standard manner as “fundamental” undervaluations. The last of those was at 625p. A fourth, at 650p a share, was dismissed in the softer language of “substantial”. Then “an agreement in principle” was reached at the weekend at 690p, or £5.5bn . Castlelake has until 3 August to put up or shut up. Continue reading...