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Shares in Easyjet soared yesterday as it was caught up in a fresh round of takeover speculation.
The FTSE 100 budget airline rose more than 11 per cent in early trading as investors seized on reports claiming global container shipping company MSC was considering a bid.
MSC insisted this was not the case, saying it ‘denies any involvement in this matter’, and Easyjet shares gave up some of their gains.
But they still closed the day up 8 per cent, or 37.2p, at 501.2p – giving it a value of £3.8billion – suggesting investors believe the airline is a takeover target.
Analysts said the recent slump in Easyjet shares – down around 13 per cent this year and still 60 per cent below pre-Covid levels – has left it vulnerable.
British Airways owner IAG was named as a potential suitor alongside rivals in the US.
Rumours: EasyJet rose more than 11% in early trading as investors seized on reports claiming global container shipping company MSC was considering a bid
Dan Coatsworth, head of markets at broker AJ Bell, said: ‘Investors will now think long and hard about who might want to own Easyjet. That explains why the shares are still trading higher despite MSC denying any involvement.
‘What’s more realistic is a rival airline bidding for Easyjet, potentially an American player looking to expand geographically, or IAG.’
He said that IAG ‘is flying high after a delayed recovery from the Covid pandemic’ with the shares doubling in the past year.
‘If ever there was a time for IAG to strike while the iron is hot, it’s now.’
Any bidder for Easyjet would have to win over founder and former boss Stelios Haji-Ioannou, who still owns a 15 per cent stake in the company.
An approach would also put pressure on chairman Stephen Hester and chief executive Kenton Jarvis, who took over this year.
Bernstein analyst Alex Irving played down the prospect of a deal with MSC. He said: ‘The industrial logic in a combination between MSC and Europe’s second-largest point-to-point airline is not obvious to us.’
Reports of interest in Easyjet will fuel fears that it could be the next company to leave the London stock market following a wave of foreign takeovers in recent years.
Neil Shah, an analyst at investor relations business Edison Group, said: ‘Easyjet has been underperforming the broader airlines sector so it’s likely to lead to speculation of interest as the trend of lowly valued UK shares being picked off by foreign buyers is a well-established theme for the London market.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .