LONDON (Reuters) -EasyJet has rejected a takeover offer and will instead raise $1.7 billion from shareholders to strengthen its position in a European market struggling to recover from the COVID-19 pandemic, the British airline said on Thursday.
The low-cost carrier did not identify its suitor, but said the all-share approach fundamentally undervalued its business and the potential bidder had since said it was no longer interested in a deal.
A source familiar with the matter told Reuters the approach was from budget rival Wizz Air, which declined to comment.
EasyJet Chief Executive Johan Lundgren told reporters the approach was "highly conditional in its nature which made it very uncertain in terms of the deliverability of it."
The airline said the planned rights issue would strengthen its balance sheet should the COVID-19 downturn continue and allow it to take advantage of an expected recovery in Europe's aviation market over the coming years by, for example, expanding its presence at key airports by buying more landing slots.
"I believe this is really a once in a lifetime opportunity," Lundgren said.
EasyJet is aiming to steal market share from legacy carriers like British Airways owner IAG and Air France-KLM as they retract their short-haul operations.
But it faces stiff competition from low-cost rivals Ryanair, Europe's biggest airline, and Wizz Air, both of which have recovered faster than easyJet over the summer.
IAG also plans to step up its low-cost offer with a...
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