STOCK EasyJet
EasyJet said the “highly conditional all-share” proposal “fundamentally undervalued the company”. Image Credit: AP

London: British airline EasyJet on Thursday revealed it had rejected a takeover approach, reportedly from rival Wizz Air, and revealed a $2.0-billion lifeline as the battered aviation sector looks to recover.

No-frills carrier EasyJet said in a statement that the bid had undervalued the group, adding that the suitor was no longer considering an offer and that the airline would now sell new shares to raise around $1.6 billion.

Bloomberg reported that the bidder had been Hungarian budget airline Wizz Air.

EasyJet meanwhile added that it had secured a new credit facility totalling $400 million. “The board recently received an unsolicited preliminary takeover approach,” EasyJet said in the statement.

“This was carefully evaluated and then unanimously rejected. The potential bidder has since confirmed that it is no longer considering an offer for the company.” EasyJet said the “highly conditional all-share” proposal “fundamentally undervalued the company”.

The rights issues would “facilitate and accelerate the group’s recovery from the impact of the COVID-19 pandemic”, it added.

Johan Lundgren, CEO of EasyJet said the financing boost would also position the airline for growth, allowing it to take advantage of investment opportunities “as the European aviation industry emerges from the pandemic”.