Founder may take easyJet private
LONDON (Reuters) – Shares in EasyJet have risen on news that founder Stelios Haji-Ioannou is considering taking the company private.
The shares were up 2.6 percent, or four pence, at 160.75p by 9:25 a.m. on Monday, valuing the airline at 627.7 million pounds.
An EasyJet spokesman confirmed on Sunday that Haji-Iannou, who set up the airline in 1995, was considering taking the firm private, but said no final decision had been reached.
Media reported earlier that the businessman, alarmed at a steep fall in the airline’s share price since 2002, could borrow to fund a 650 million pound takeover. Haji-Iannou’s family owns 41 percent of EasyJet.
EasyJet shares plunged last month after the airline said 2004 pre-tax profits could fall under market forecasts due to high fuel costs, a price war with Ireland’s Ryanair and competition with similar no-frills European carriers.
EasyJet shares traded over 500 pence in May 2002.
By: EAL_KING - 5th July 2004 at 19:02
here is a better report
Stelios mulls buying Easyjet back
Stelios confirms retaking the airline private is a possibility
Easyjet founder Stelios Haji-Ioannou has confirmed reports that he is considering taking the airline private.
A spokesman for Mr Haji-Ioannou, whose company EasyGroup today owns 41% of Easyjet, confirmed that the Greek entrepreneur may buy back the firm.
The spokesman said no final decision had yet been made.
The comments come a month after Easyjet’s share price fell by 15% following a profits warning caused by the recent high price of fuel.
“It is an option but there is no further comment,” an EasyGroup spokesman quoted Haji-Ioannou as saying on Monday.
Easyjet’s share price rose by almost 3% following the news.
Not surprising
It had been reported at the weekend that Mr Haji-Ioannou, whose family owns 41% of Easyjet, may spend some £650m to take the business private.
This possibility has been around since Easyjet’s last profits warning and I would say it’s very feasible
Airline analyst Mike Powell
Easyjet share price
Founded in 1995, Easyjet warned last month that fuel costs could cut 2004 profits by about £4m ($7m) due to fuel prices.
Analysts said Mr Haji-Ioannou’s announcement was not unexpected.
“This possibility has been around since Easyjet’s last profits warning and I would say it’s very feasible,” said Mike Powell, aviation analyst at Dresdner Kleinwort Wasserstein.
Tough sector
Mr Powell said it would only have a positive impact on Easyjet’s share price.
Like all airlines, Easyjet has been hit by high fuel bills
“Clearly it’s going to be a factor in the share price,” he said.
The rise in fuel prices which has hit Easyjet’s profits comes at a time of extreme competition in the European airlines sector.
One key rival in the low-cost market, Ireland-based Ryanair, said its passenger numbers were up 24% to 2.27 million in June, when compared to the same month last year.
The company has been cutting prices to keep its seats filled, and its load factor – the proportion of seats filled – was 87% of capacity, up from 79% in the same month the previous year.
“These figures are in line with our previous guidance of increased load factors and declining yields through the summer,” a Ryanair spokeswoman said on Monday.
By: Mark L - 5th July 2004 at 16:15
Yes but everyone needs secuity passes these days!
By: andrewm - 5th July 2004 at 14:25
I wouldnt be so sure about pulling the strings as he futhered himself from the business and now needs even a Visitors pass to get into easyLand even when a monkey (who watches tv and lives in uk) could recognise who he was!
By: Mark L - 5th July 2004 at 14:20
Stelios still pulls most of the strings in Easyjet anyway, this is more a matter of getting the most money rather than control over the business I think.
Due to the volatility of the stock market, and Stelios’ other business “ventures” I think this is quite a shrewd business move.
By: andrewm - 5th July 2004 at 13:16
This indeed is good news, if it happens, for easyJet as it means they will get their best PR weapon but also they will get to hide their accounts from Ryanair etc more so than when the company is a PLC.
I think it would be a good step for them to go with Stelios as a “leader” as they have got enough money as possible from the stock market and its time for good old fashioned Stelios Leadership!
Ray Webster is fast approaching retirment age according to my source and i think it would be great for Stelios to be piloting the company again!
Long Live Stelios and easyJet!!!!
Remember you can win easyJet return flights on their route network www.group-flight.org
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July 5, 2004 at 11:51 am