Easyjet accepts $7bn takeover offer

**Leanna Byrne** (0:00)
One of Europe's largest airlines is flying ahead with a US takeover. It's World Business Express from the BBC World Service. I'm Leanna Byrne. Also in takeover news, Sky is buying one of Britain's biggest broadcasters and how the rock band Metallica is upskilling college students.
Yes, Europe's second biggest low-cost airline, Easyjet, has agreed in principle to being sold to the US investment firm Castle Lake. The deal would value the British-based carrier at nearly $7 billion. Our reporter, Barbara George, has all the details for us.

**SPEAKER_3** (0:40)
So Easyjet rejected four previous approaches from Castle Lake, the US firm, because the board believed the airline was being undervalued. But Castle Lake has now come back with a higher offer worth about $7 billion, and Easyjet are prepared to engage with the proposal, but it's not a done deal yet, because Castle Lake still has to make a formal offer, and there are regulatory questions to resolve around European ownership rules.

**Leanna Byrne** (1:06)
Okay, so what does this mean for passengers? What does it mean for prices, competition, all that?

**SPEAKER_3** (1:11)
So in terms of passengers, nothing is likely to change immediately. Easyjet is one of Europe's largest airlines that operate around 1200 routes in valuable airports like Gatwick, Paris and Geneva. So these slots are a big part as to why the airline isn't attractive to a buyer. The key question is what Castle Lake does with the company if the deal goes through. So they could invest in growth and make Easyjet an even stronger competitor to Ryanair and Whiz Air, or they could focus more heavily on boosting profitability. At this stage, we actually don't know.

**Leanna Byrne** (1:44)
And what does this mean for the London Stock Exchange, because this seems like this will be another loss for the major financial exchange.

**SPEAKER_3** (1:52)
Easyjet is one of Britain's best known consumer brands. So if it leaves the London Stock Exchange, it'd be a massive loss for the London market. The company isn't one of the biggest firms in the footsie, but it's a household name. And their departure would add to concerns about London losing listed companies through takeovers, delisting and moves to oversee exchanges. It also feeds a broader narrative that the London stock market is getting smaller, and some international investors think UK companies are worth more when not listed in London.

**Leanna Byrne** (2:25)
Barbara George there with me now, Jane Sidnam, investment director at Rathbones Investment Management. Jane, what do you think? Do you think that's a bad luck for the London Stock Exchange?

**Jane Sydenham** (2:35)
Well, I mean, as your guest was just saying, it is a really well-known consumer brand. But of course, just because it's a well-known consumer brand doesn't mean that it's really negative for the exchange. I mean, there are thousands of other companies listed in London. So I think what it shows is they've managed to build a really good business.
It is another name, I guess, in this ongoing narrative about stock markets. But I don't think it's that serious a problem.

**Leanna Byrne** (3:03)
All right. Well, speaking of takeovers, Sky has agreed to buy the British broadcaster ITV for $2 billion. It's one of the biggest takeovers in British media history. So what's the attraction for Sky here, do you think?

**Jane Sydenham** (3:15)
Well, it gives them great scale. Obviously, they've got to compete against these enormous streaming giants in the US, whether it's Netflix or Paramount, Warner Brothers, etc. They're competing on this enormous scale and they need that extra weight in terms of audience reach, which is what this takeover will give them. It will give them access to all sorts of customers that they haven't had before.
At the same time, it just broadens their offering.

**Leanna Byrne** (3:44)
Any concerns, do you think?

**Jane Sydenham** (3:45)
I think the concerns are that eventually, the free-to-air part of the business may cease. At this point in time, ITV have committed that they will continue to offer some of those well-known programs like Coronation Street and so on free to their consumers. But eventually, it's possible that they will start to charge, and then that will change the profile of media consumption yet again.

**Leanna Byrne** (4:10)
Perfect. Jane Sydenham, thank you so much.
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