The recommended offer values easyJet at £6.90 per share, a significant improvement on Castlelake's earlier proposals, which were as low as £5.60 per share. The announcement triggered a strong reaction from investors, with the airline's shares jumping nearly 10% after the deal was unveiled. Before the announcement, the stock had closed at 610 pence.
Under UK takeover regulations, Castlelake must submit a formal offer by 3 August if it intends to complete the acquisition.
In a joint statement released by both companies, Castlelake indicated that it has no plans to dismantle or split up the airline. Instead, the investment firm said it intends to support easyJet's existing long-term strategy while strengthening the business.
easyJet said Castlelake had "emphasised its tremendous respect for easyJet and its people, along with its intention to support its future growth and transformation to a stronger, more resilient European airline for the benefit of all stakeholders if the transaction proceeds to completion."
The airline added that Castlelake is "supportive of easyJet's fleet modernisation programme, which it regards as central to the company's long-term competitiveness, efficiency and sustainability objectives."
A notable feature of the proposed transaction is that existing shareholders will have the option to retain an investment in the company under Castlelake's ownership if the takeover is completed, rather than automatically selling their holdings when easyJet leaves the London Stock Exchange.
The airline's founder and largest individual shareholder, Stelios Haji-Ioannou, whose family controls around 15% of the company, has not publicly commented on the proposed acquisition.
The takeover has reignited concerns that overseas investors are acquiring well-established British companies at prices many believe fail to reflect their true value.
Kathleen Brooks, research director at brokerage firm XTB, described the development as another example of the challenges facing London's stock market.
"An iconic British aviation name" would be put in US hands, she said. "This deal is symbolic, as it suggests a lack of stock market growth, and persistent underperformance of UK equities means that there is a massive for sale sign above UK corporates."
Garry White, chief investment commentator at financial services firm Charles Stanley, echoed those concerns.
"The number and size of takeover bids from overseas buyers suggest that many UK-listed companies remain significantly undervalued. It is clear UK companies are currently being sold off on the cheap," he said.
However, not everyone believes the deal undervalues easyJet. Andrew Lobbenberg, an analyst at Barclays, argued that the offer represents fair value for investors while also creating an attractive investment opportunity for Castlelake.
"We do not expect a radical change in the business plan of easyJet. We expect that Castlelake will continue to develop the holidays business and grow the airline modestly," he said.
Lobbenberg added that companies undertaking major capital investment programmes are often undervalued by public markets, making them attractive targets for private equity buyers.
Headquartered at London Luton Airport and operating a major base at Gatwick Airport, easyJet is one of Europe's largest low-cost carriers. The airline employs approximately 19,000 people and carries around 93 million passengers annually across its extensive European network.
Before Castlelake's renewed takeover interest emerged, easyJet's shares had fallen by roughly 30% over the past year, reflecting broader pressures facing the aviation industry and investor concerns over future growth. The proposed acquisition now represents one of the biggest takeover deals involving a UK-listed airline in recent years and is likely to remain under close scrutiny as shareholders consider the offer.