EasyJet Spurns Buyout Approach, Sets $1.65 Billion Stock Sale
(Bloomberg) -- EasyJet Plc rejected an unsolicited takeover approach and said it plans to raise more than $2 billion, giving the U.K. airline a buffer to see it through a return to leisure travel. The shares fell as much as 14%.
The preliminary offer was conditional, all-stock and had a low premium, EasyJet said Thursday in a statement. It was rejected unanimously by the board and has been withdrawn.
Instead, the discount airline will sell 1.2 billion pounds ($1.65 billion) of stock through a rights offering and raise an added $400 million in debt.
EasyJet shares slid 7% to 732.60 pence as of 8:12 a.m. in London. The stock is down 11% this year.
The board reached the decision to remain independent without hesitation, Chief Executive Officer Johan Lundgren said on a conference call. He declined to name the suitor, and said the offer has been withdrawn.
Several potential industry buyers, such as Air France-KLM and Deutsche Lufthansa AG, are unlikely to bid because of bailouts they received during the coronavirus crisis. British Airways owner IAG SA said last month that it planned to bring back short-haul flights from London Gatwick airport, where EasyJet is the biggest operator.
EasyJet has raised more than 5.5 billion pounds in liquidity since the start of the pandemic as coronavirus shutdowns brought the global airline industry to its knees. The company plans to fly at about 57% of 2019 capacity during the fourth fiscal quarter.
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