Castlelake's latest proposal – its fourth – was for £6.50 a share, up from the £6.25 a share it offered earlier this week, which would value easyJet at just shy of £5 billion.

EasyJet said the fourth proposal still "substantially undervalued" the carrier and its prospects, and continued to "give rise to significant questions of deliverability". It has been unanimously rejected by easyJet's board.

After publicly rejecting Castlelake's third bid on Monday (22 June), the board described Castlelake's interest as "highly opportunistic" owing to easyJet's depressed share price, which has been affected by the conflict in the Middle East, and vowed the carrier would not be acquired "on the cheap".

However, on this occasion and at Castlelake's request, EasyJet has agreed to share limited commercial information with the group in the hope it "might produce a more attractive proposal that better reflects the value of easyJet and its prospects".

Castlelake has been granted a nine-day extension "to work on a further increased proposal and to address the board’s deliverability concerns". The group now has until 5pm on Sunday 5 July to come back with a firm intention to make an offer or not.

"EasyJet is in a position of strength, underpinned by an investment grade balance sheet with a net cash position, alongside strong customer satisfaction and high employee engagement," said the easyJet board.

"The board remains highly confident in easyJet’s strategy and its ability to deliver attractive long-term value for shareholders. The company remains focused on executing its medium-term target of delivering greater than £1 billion profit before tax."

EasyJet's share price had risen to £5.66 by 9am on Thursday (25 June), its highest level for more than a year.