British airline easyJet rejects takeover offer and raises $1.7bn

Unsolicited bid 'fundamentally undervalued the business', says budget carrier

British airline easyJet said on Thursday it had rejected a takeover offer and is raising £1.2 billion ($1.65bn) from shareholders to fund its recovery from Covid-19 as it looks to expand its operations.

The budget carrier said it also plans to raise $400m in debt to help it navigate through the post-Covid era and protect it from “downside risks” should the pandemic continue “to dampen or delay” the recovery of passenger volumes over the next 12 months.

Johan Lundgren, chief executive of easyJet, said raising the capital will strengthen the airline’s balance sheet, allowing it to accelerate its post-Covid 19 recovery plan.

“It will also position us for growth so that we can take advantage of the strategic investment opportunities expected to arise as the European aviation industry emerges from the pandemic,” he said in a trading update posted on the London Stock Exchange where easyJet's shares are listed.

The company said the recent “unsolicited preliminary takeover approach” was “carefully evaluated and then unanimously rejected, because the all-share approach “fundamentally undervalued” the business

“The potential bidder has since confirmed that it is no longer considering an offer for the company,” easyJet said.

EasyJet has raised more than £5.5bn in liquidity since the start of the pandemic when coronavirus-induced shutdowns grounded planes across the globe, bringing the airline industry to its knees.

The airline said its UK domestic capacity in August was at 105 per cent of 2019 levels while its EU capacity was at 81 per cent of 2019 levels, “demonstrating the strength” of the group’s UK domestic and intra-EU flying schedule.

The company plans to fly at about 57 per cent of capacity during the fourth fiscal quarter, a significant increase on the third quarter, when it flew at only 17 per cent of its 2019 capacity.

“During Q4 2021, the company expects to increase capacity allocation and improve expected load factors on both UK domestic and intra-EU flying, with UK domestic capacity already at pre-pandemic levels,” easyJet said.

With UK domestic capacity already at pre-pandemic levels, the company expects its flying capacity in the first quarter of next year to hit 60 per cent of its level in the first quarter of 2019.

Under the rights issue, shareholders will be able to buy 31 new shares for every 47 existing shares at a price of £4.10 pence each. This is a 35.8 per cent discount on the theoretical ex-rights price of £6.38 pence per share on September 8, the airline said.

The rights issue is underwritten by BNP Paribas, Credit Suisse, Goldman Sachs, Santander and Société Générale.

“Since the onset of the pandemic, we have undertaken decisive and robust action to restructure our operations, addressed our cost base and secured our financial position, keeping our investment-grade credit rating,” Mr Lundgren said.

“We have worked hard to maintain our customer-friendly brand and network, and been rewarded with immediate growth in demand when travel restrictions have been lifted.”

Updated: September 9th 2021, 9:15 AM
Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

Company Profile:

Name: The Protein Bakeshop

Date of start: 2013

Founders: Rashi Chowdhary and Saad Umerani

Based: Dubai

Size, number of employees: 12

Funding/investors:  $400,000 (2018) 

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