EasyJet said it would raise £1.2bn from shareholders in a rights issue to strengthen its balance sheet after turning down a preliminary takeover approach.
The budget airline said the trading environment remained uncertain and that raising funds would protect its long-term position in the European aviation market. A stronger balance sheet will protect against a “downside scenario” of continued travel restrictions and a slower recovery for travel.
EasyJet also said it recently received an unsolicited preliminary takeover approach. The board rejected the approach and the potential bidder is no longer considering an offer, it said.
“The indicative proposal took the form of a low premium and highly conditional all-share transaction which, in the Board’s view, fundamentally undervalued the company,” easyJet said. “In deciding to reject it, the board took into account all relevant factors including the highly conditional nature of the proposal and the certainty and strategic opportunity that the rights Issue presented to the company.”
EasyJet said the right issue would also support its credit rating and give the company flexibility to act on opportunities. The company said it had also agreed a new four-year senior secured revolving credit facility of $400m.
