A sell-out of easyJet by Stelios Hajiloannu is considered unlikely.
With a takeover bid by the Icelandic FL Group a distinct possibility, UK low-cost carrier easyJet has strengthened its financial advisory team with the appointment of London-based bank Goldman Sachs. It will also retain Credit Suisse First Boston (CSFB) to provide additional advice as required.
The FL Group is now the second-largest shareholder after easyJet’s founder Stelios Haji-Ioannu, having steadily built up its stake in the carrier to 16.2%. Adding Haji-Ioannu’s stake to the shareholdings held by his brother Polyos and sister Clelia, it is clear that the family, with a combined 40.5% interest, still has a formidable hold on the airline.
Should Stelios sell out, it would be difficult for easyJet to fend off an FL bid, although it appears to be preparing to convince shareholders they will benefit most by keeping the status quo. However, a sell-out by Stelios is considered unlikely, at least until the share price reaches a level where the FL Group makes an offer he cannot refuse. In mid-January, the share price passed the £4 ($7) mark, having been £1.2 when the FL Group acquired its first shares in easyJet, but London analysts believe it will need to go above the £5 peak reached in 2002, which would value easyJet at £2 billion.
Andrew Lobbenberg, analyst with ABN Amro, in a recent assessment for the bank, stated that an outright takeover “does not appear likely … at current price levels”. He outlined three other possible scenarios that may be under consideration by the FL Group, none of which are considered near-term possibilities: taking the company private jointly with Stelios; placing its stake in the market as a block or over time; or merging a restructured Sterling (see page 34) with easyJet in return for a greater stake. The last-named, he said, “should not be ruled out, [but] the complexities of integrating both easyJet with Go and Ryanair with buzz suggests this appears to be a low probability.”
The FL Group, led by chief executive Hannes Smárason, is keeping its intentions hidden. Not only about easyJet, but also Finnair, in which it increased its stake in January to 6.1%, after it had raised $700 million plus on the Icelandic stock exchange. The group has the money to invest, but taking over easyJet may stretch its financial resources too far. ■
GUNTER ENDRES / LONDON
Source: Airline Business
