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CEO Johan Lundgren wants to take market share from the similarity British Airways and Air France-KLM as they restructure their short-haul operations, but is the cash enough to give it a headstart against Ryanair?
Matthew Parsons
British airline company easyJet stated it had declined a takeover offer on Thursday by Wizz Air and would raise $1.7 billion from shareholders to money its pandemic healing and broaden operations.
The business stated the all-share approach essentially undervalued business. It stated the possible bidder had because mentioned that it was no longer interested in an offer.
EasyJet said it would utilize the rights issue to enhance its balance sheet and also to benefit from growth chances that arise from the expected recovery in Europe’s air travel market over the coming years.
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It wishes to steal market share from legacy carriers like British Airways-owner IAG, once a rumoured suitor of easyJet, and Air France-KLM as they restructure their short-haul operations.
CEO Johan Lundgren stated the capital raise would allow the airline to accelerate its post-Covid-19 recovery strategy and position it to benefit from strategic financial investment chances, such as broadening its existence at essential airports by buying more landing slots.
“This capital increase will permit us to build on our basic functional strengths and network method for our clients along with accelerate long-term worth creation for our investors,” he stated.
Under the rights concern, investors will be able to purchase 31 brand-new shares for each 47 existing shares at a cost of $5.66 each, a 35.8 percent discount rate on the theoretical ex-rights price of $8.81 per share on Sept. 8, easyJet said.
The rights problem is financed by BNP Paribas, Credit Suisse, Goldman Sachs, Santander and Societe Generale.
It also revealed a brand-new committed $400 million protected revolving credit center.
UPDATE: Reuters upgraded it story to report that easyJet turned down a deal from Wizz Air, according to sources.
(Reporting by Sarah Young and Paul Sandle; Modifying by Kate Holton)
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