EasyJet’s struggle to stay aloft during the pandemic has opened up the path for an "acquisition - merger" amid efforts to raise Funds ; But, its happening for real at the moment !
Now, there are reports that, EasyJet was in an acquisition negotiation, but has eventually rejected the takeover approach from an unknown suitor, which industry speculates as Wizz Air.
The efforts by Wizz Air, if genuine, would have made Ryanair worried, given the size of the market share and fleet these two airlines control at the moment.
However , it seems , EasyJet will prefer to raise $1.7 billion from existing shareholders and face the Pandemic on it's own , when the founder is not in a mood to infuse further funds.
In the past , there were reports of the founder of the Company - Stelios haji-ioannou , unhappy with the EasyJet management , he had said,
'They lost £1.5billion in the year to September 2020 and my guess is that they will lose a similar sum this year. For as long as the scoundrels squander the company's money on more Airbus planes, I am not going to invest any of my money with them.'
On the Current reports, neither EasyJet does name the suitor, nor Wizz Air acknowledges the same !
However, EasyJet CEO Johan Lundgren says, the approach was "highly conditional in its nature which made it very uncertain in terms of the deliverability,"
In the Month of January 21, EasyJet had secured a £1.4billion state-backed bailout to help maintain liquidity and survive the pandemic. The five-year loan had been underwritten by a group of banks and part-guaranteed by UK Export Finance, a government agency.
That time, Johan Lundgren, Easyjet's boss had given a statement saying,
'Easyjet has taken swift and decisive action, having now secured more than £4.5billion in liquidity since the beginning of the pandemic. The loan facility, provided on commercial terms, reflects constructive and collaborative work between Easyjet, multiple banks and UK Export Finance.'
Now, EasyJet has to raise the funds again, its second of the pandemic, would reinforce the balance sheet should the COVID-19 downturn continue and allow it to operate more aggressively once the recovery arrives.
"I believe this is really a once in a lifetime opportunity," Lundgren said.
EasyJet wants to make the most from domestic or short-haul operations, those were being vacated by players like British Airways & AirFrance-KLM. But. Ryanair's hawkish fares and Wizz Air's expansion are a threat, which is real !
Talking of Wizz Air, it would definitely see EasyJet as an easy strategic target ,owing to the later's network in countries like Britain, Italy, Switzerland, Germany and France. what is even better is, both the carriers operate an Airbus fleets.
