Budget airline easyJet has rebuffed a takeover approach from Hungarian rival Wizz Air and is instead raising £1.2bn in a rights issue to try and bounce back from the pandemic.
Shares plunged 9.5pc as it unveiled the capital raise and said it had rejected the “low premium and highly conditional all-share” offer which “fundamentally undervalued the company”.
EasyJet did not identify the bidder but the identity was reported as Wizz Air by multiple outlets including Reuters, Bloomberg and the Financial Times.
EasyJet plans to use the £1.2bn rights issue to pay down debt and help it steal market share from larger rivals, particularly on short-haul routes, as the industry re-shapes itself in the wake of the pandemic.
Johan Lundgren, chief executive, said it was a “once in a lifetime opportunity”.
He added: “Since the onset of the pandemic, we have undertaken decisive and robust action to restructure our operations, addressed our cost base and secured our financial position, keeping our investment-grade credit rating.
“We have worked hard to maintain our customer-friendly brand and network and been rewarded with immediate growth in demand when travel restrictions have been lifted.”