It follows four failed bids from Castlelake, which easyJet dismissed as attempts to acquire it "on the cheap". However, following the fourth bid, easyJet agreed to share "limited commercial information" with the firm in the hope of attracting a better offer.
Castlelake, which owns around 2% of easyJet through a fund it manages, came back with a new offer for easyJet at the weekend worth £6.90 a share. EasyJet's share price opened almost 10% up on Monday morning (6 July) at £6.10 after closing at £5.58 on Friday (3 July).
The agreement doesn't mean a takeover is a foregone conclusion, though; Castlelake would have regulatory hurdles to clear and has until 5pm on 3 August to disclose a firm intention to make an offer or not.
These challenges include complying with EU rules dictating easyJet, as a European company, must be at least 51% European owned. Any firm offer would go to a vote of easyJet shareholders.
EasyJet has argued throughout the Castlelake has sought to take advantage of its depressed share price owing to the impact of the Iran war on travel, which has seen easyJet's stock fall by almost a third over the past year.
The latest offer was confirmed in a statement issued by easyJet on Sunday (5 July), in which the easyJet board said it would be "minded" to recommend the deal to shareholders.
It also marked a change in tone following its four previous rebuttals. "In discussions between the parties, Castlelake has emphasised its tremendous respect for easyJet and its people, along with its intention to support its future growth and transformation to a stronger, more resilient European airline," it read.
"Castlelake is supportive of easyJet’s fleet modernisation programme, which it regards as central to the Company’s long-term competitiveness, efficiency and sustainability objectives."
