DAVY VIEW

Castlelake has now submitted a fifth indicative and conditional proposal to acquire easyJet for £6.90 per share in cash, together with a partial alternative involving unlisted shares. The easyJet Board has concluded that the financial terms are at a value that it would be minded to recommend to shareholders. The recommended bid does not surprise us given where the shares were trading over the last number of years. This is a significant development in European aviation, with easyJet having c.10% of the European market. We are likely to review our price target close to the bid as we believe there is a high probability of it succeeding, and with the stock trading on the bid/asset value rather than near-term trading conditions.