easyJet share price: Budget carrier mulls bid for Monarch Airlines

on Apr 18, 2016
Updated: Oct 21, 2019

easyJet (LON:EZJ) is weighing a bid for Monarch Airlines, the leisure carrier which was rescued from a collapse a year and a half ago, The Sunday Times has revealed. The FTSE 100 group, however, is reportedly up against a range of other suitors.

easyJet’s share price has gained ground this morning, propped up by a fall in the oil price which spells lower fuel costs for airlines. As of 08:15 BST, the shares were changing hands 0.90 percent higher at 1,460.00p, outperforming the benchmark FTSE 100 index which has slipped deep into the red and currently stands 0.79 percent lower at 6,293.94 points.
The Sunday Times reported yesterday that easyJet had held takeover talks with Monarch Airlines, which has the same base, Luton Airport. The leisure carrier is said to have appointed Deutsche Bank to examine its options and handle prospective bidders. The FTSE 100 group is thought to be up against a range of potential suitors, including China’s HNA.

A potential takeover of Monarch would mark a strategy shift for easyJet which has grown organically in the past few years, with its most recent acquisition being the 2007 takeover of GB Airways. Monarch, however, would provide the low-cost carrier with another lucrative slug of slots at Gatwick, as well as increased capacity at Luton, Birmingham and Manchester.
The news comes ahead of easyJet’s half-year update on May 10. In January, the FTSE 100 group said that it expected to meet market forecasts for full-year pretax profit of £738 million.
In analyst ratings, Kepler Capital Markets reiterated its ‘reduce’ stance on easyJet today with a valuation of 1,450p. Earlier this month, Beaufort Securities reaffirmed the airline as a ‘buy’, without specifying a price target.
As of 08:37 BST, Monday, 18 April, easyJet plc share price is 1,459.00p.