EasyJet hires Goldman to fend off Icelanders

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The Independent Online

EasyJet appeared to have bolstered its defences against a possible bid from the Icelandic aviation group FL after it emerged that the no-frills airline had hired the top City investment bank Goldman Sachs.

The US bank replaces Credit Suisse First Boston as the airline's financial adviser, although CSFB will remain in a joint broker role alongside ABN Amro. The appointment was interpreted as a sign that easyJet's board, led by Sir Colin Chandler, regard FL as a potential predator.

The Icelandic company, which owns the country's top airline Icelandair, is the second-biggest shareholder in easyJet behind Stelios Haji-Ioannou, its founder. FL, which has been amassing its stake for more than a year, increased its shareholding to 16.2 per cent in October, just fractionally smaller than Mr Haji-Ioannou's 16.5 per cent.

FL has kept its cards close to its chest, but the presence of Baugur's Jon Asgeir Johannesson, the high-profile Icelander who owns much of the British high street, on its board has fuelled speculation that it plans to mount a bid for easyJet.

The Icelandic aviation group has already followed Baugur's acquisitive footsteps by buying Sterling Airways, Europe's No 4 low-cost airline, last October for $240m (£135m). Sterling had recently acquired Maersk Air from the AP Moller shipping group.

FL also recently amassed a war chest by raising $728m on the Icelandic stock exchange, and announced that its board of directors had the authority to increase the company's share capital if conditions were met.

A spokesman for easyJet confirmed the appointment of Goldman Sachs. He said the airline's "requirements" had changed since CSFB co-handled its flotation with UBS. He did not elaborate further.

The future of easyJet rests in Mr Haji-Ioannou's hands as his family controls 40.5 per cent of the group's shares. So far, he has rejected all takeover approaches, insisting he is not interested in a sale. The entrepreneur owns the "easy" brand privately and licenses it to the airline, inextricably linking his fortunes to those of the carrier.