Budget airline easyJet has confirmed that private investment firm Castlelake is considering a potential takeover offer, prompting a sharp rise in the company's share price and fuelling speculation over another possible departure from the London stock market.

The budget carrier said its board has not been approached and has held no discussions with Castlelake, which announced on Friday it is in the early stages of evaluating a possible bid. In a statement, the easyJet board stressed that there is no certainty an offer will materialise but said it would consider any proposal with a focus on "valuation and deliverability".

EasyJet argued that its current share price does not reflect the company’s long-term value, noting that market sentiment has been temporarily affected by Middle East tensions, higher fuel prices and weaker consumer confidence. The board also identified the significant regulatory, financial and operational hurdles involved in any takeover attempt.

The airline maintained that it remains in a strong financial position, supported by an investment-grade balance sheet, a net cash position and confidence in its strategy to deliver more than £1bn in annual pre-tax profit over the medium term.

EasyJet founder Stelios Haji-Ioannou, and his family, still own 15.3% of the airline, with asset managers UBS, BlackRock, Invesco and Wellington among the other main shareholders.

EasyJet’s share price jumped sharply today, rising about 8–12% intraday, after confirmation of the potential takeover bid.

“The fact the shares have ‘only’ jumped 12% on Castlelake disclosing takeover interest implies the market doesn’t believe a bid will succeed," said Dan Coatsworth, head of markets at AJ Bell.

“EasyJet’s biggest shareholders are unlikely to accept a takeover bid unless there is a knockout price. Castlelake is preying on the weak, pouncing when easyJet faces its biggest headwind since the global pandemic. Investors won’t want to sell in the darkest of hours unless they are getting generous compensation."

Coatsworth added that airline shares can be volatile at the best of times, prone to wild swings as the industry has form in being dealt with a multitude of challenges from strikes to volcanic dust clouds.

The interest comes during a challenging period for easyJet, which was recently relegated from the FTSE 100 and has warned that higher fuel costs linked to geopolitical tensions will widen first-half losses. Despite these pressures, the company says it is well positioned to manage market volatility.

Castlelake, which is majority owned by private equity giant Brookfield Asset Management, manages around $37bn in assets and has previous experience investing in the aviation sector. Under UK takeover rules, it has until 26 June to decide whether to make a formal offer.

The development also reignites concerns about the shrinking number of major companies listed in London, with several businesses having either left the market or signalled plans to do so in recent years.

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