- How this has effected both companies stocks
- What analyst Daniel Roeska thinks of this move by EasyJet
EasyJet Plc rejected a takeover approach from Wizz Air Holdings Plc, according to people familiar with the plan, as its Hungarian discount rival sought to take advantage of a recovery in European flights. The preliminary offer was conditional, all-stock and had a low premium, EasyJet said Thursday without naming the bidder. The U.K. carrier said the approach was rejected unanimously by its board and has been withdrawn. Shares of EasyJet fell as much as 14% as the company said it will instead raise $2 billion in stock and debt. The funding will provide a buffer to get through the slow winter season and position the carrier for a tentative rebound in leisure travel. Representatives for Wizz Air and EasyJet declined to comment on the offer.
“EasyJet’s network and customer reach combined with Wizz’s low-cost management style would be a winning combination,” Daniel Roeska, an analyst at Sanford C. Bernstein, said in an investor note. “It would definitely be a major shake-up of the European space.” EasyJet shares dropped 10% to 710 pence as of 1:18 p.m. in London after the company said it will pursue a rights offering of 1.2 billion pounds ($1.65 billion) and raise $400 million in debt.