EasyJet has rejected a takeover bid from a rival and opted to raise £1.2 billion (€1.4 billion) from its shareholders to aid in its recovery from the coronavirus pandemic.
The airliner, which expects to operate at around 60% capacity from June to September, revealed it received an unsolicited offer, which it claims undervalued the company, before revoking its interest.
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The aviation and travel sectors have been among the most affected by the Covid-19 pandemic. A slow return to travel and the onset of the Delta variant has not helped the situation.
Combined losses for Q4 2020 and Q1 2021 clocked in at around £701 million (€818 million) before tax, and around £2 billion (€2.33 billion) throughout the 18-month crisis.
The pandemic also caused the company to suffer its first losses in over 25 years.
The airliner has also revealed plans to take on an additional $400 million (€467 million) in debt.
The group's CEO revealed the share sales should "help accelerate our Covid-19 recovery plans", adding that it was poised to bounce back from the pandemic, although it doesn't expect to fully return to pre-pandemic levels until 2023.
It is also expecting to operate at around 57% of 2019 levels for the final three months of 2021 as the summer holiday period begins to subside.
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John Lundgren, EasyJet's CEO revealed on Thursday (September 9) the airliner's board has "no hesitation" to reject the rival's offer.
“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,” the company said in a statement.
Lundgren has also expressed support for lowering the cost of Covid testing for passengers in a bid to get consumer confidence up again to start booking new flights.
This mimics similar calls from airliners as an alternative to simply grounding flights and banning international travel, causing massive losses for the sector.
The company is also in the midst of a massive cost-cutting campaign, said to bring in around $500 million (€584 million) for the fiscal year.
Lundgren said the funds raised will help the company strengthen its balance sheet and enable them to "accelerate [its] Covid-19 recovery plan".
"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," he added.
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Both Bloomberg and the FT report the rival bid was made by Hungarian airliner Wizz Air, a low-cost rival to EasyJet.
The company have reportedly been hoping to use the coronavirus pandemic to expand into western Europe.
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