EasyJet’s board has reached an agreement in principle on the financial terms of a fifth takeover proposal from US investment firm Castlelake, valuing the Luton-based airline at approximately £5.2 billion. The £6.90-per-share cash offer, disclosed on Sunday, represents a 24% premium to Friday’s closing price of £5.58 and marks a shift after the carrier spent weeks dismissing earlier approaches as “highly opportunistic” attempts to buy the company “on the cheap”. The board stated it would be “minded to recommend” the bid to shareholders should Castlelake formalise its intention by the extended deadline of 3 August.

The negotiations were marked by candid public statements and mutual criticism. Castlelake, which already holds a 2.14% stake through managed funds, had submitted four prior bids ranging from £5.60 to £6.50 per share, each rejected. The US firm accused EasyJet’s board of failing to “engage meaningfully”, while the airline pointed to a share price it described as temporarily depressed by the surge in jet fuel costs following the Iran conflict. A breakthrough came in late June when EasyJet granted limited access to commercial information, enabling Castlelake to refine its offer. The agreement in principle does not constitute a firm offer, and the statement cautioned that “there can be no certainty” a transaction will proceed.

Viewed from London, the proposed deal would privatise one of Europe’s largest low-cost carriers, which has been listed since November 2000. EasyJet’s fleet of modern Airbus A320 aircraft and its portfolio of landing slots at constrained airports in London, Milan and Geneva are considered its most attractive assets. The airline has been under financial strain, reporting a deepened first-half loss of £377 million and warning of continued pressure on summer bookings as fuel costs remain elevated. The founder’s family, led by Stelios Haji-Ioannou, remains the largest shareholder with a 15.3% stake.

Castlelake, which manages around $38 billion in assets and is a significant aircraft lessor with a fleet of 375 planes, has emphasised its “tremendous respect” for EasyJet and its intention to support fleet modernisation. The firm previously acquired a 32% stake in Scandinavian Airlines, a holding now being bought by Air France-KLM. To satisfy European Union ownership and control rules requiring majority EU ownership, Castlelake has partnered with former EasyJet executive Peter Bellew and Mark Breen. European regulators will scrutinise the structure of any final bid to ensure compliance.

The next milestone is 3 August, when Castlelake must either announce a firm intention to make an offer or withdraw. If a formal bid materialises, it will be put to a shareholder vote and will require regulatory clearances. Until then, the board has advised shareholders to take no action.