Stelios 'keeps all options open' over easyJet bid

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The Independent Online

The founder and former chairman of easyJet, Stelios Haji-Ioannou, has again refused to rule out a takeover bid for the low-cost airline, saying: "I want to keep all my options open."

The founder and former chairman of easyJet, Stelios Haji-Ioannou, has again refused to rule out a takeover bid for the low-cost airline, saying: "I want to keep all my options open."

In a further twist to the intrigue over whether Stelios will attempt to take easyJet private once more, the serial entrepreneur also disclosed that a bid for the airline was not dependent on him raising money from the sale of his Greek shipping business Stelmar. The shipping deal is worth £320m but most of this will be in the form of shares in the company which is buying Stelmar.

Stelios, who together with his brother and sister still owns 41 per cent of easyJet, dismissed suggestions that the position of the airline's chief executive, Ray Webster, was under threat following two profit warnings in the space of a month.

However, he did disclose that steps were being taken to improve easyJet's communications with the City. An easyJet spokesman later confirmed that it was seeking to hire a full-time investor relations manager.

Stelios said he was reluctant to rule himself out of bidding for easyJet because that would bar him under Takeover Panel rules from making an offer for the airline for 12 months.

There is growing speculation within the airline industry that Stelios, who stepped down as chairman in 2002, will indeed indicate an interest in bidding for easyJet. "I would not be surprised if at some stage he raised the idea of doing it," said one informed source.

The source said he believed that Stelios's motivation could in fact be to flush out any other would-be bidders such as private equity firms or even rival airlines. At last night's closing price of 160p, easyJet is worth £640m - a price which would make it a "steal" according to most observers.

"Right now sentiment is against easyJet, fuel prices are going the wrong way, the low-cost sector is in turmoil and the geopolitical climate does not help the airline industry generally," said one. "But think where easyJet could be in three years and what sort of valuation it could attract."

There is £440m of cash within the business, including £220m of net cash. In addition, easyJet has largely finished paying the deposits on its order for Airbus aircraft. According to some estimates, the Airbus deal was done on such advantageous terms that easyJet could operate the aircraft for five years and still sell them on at a profit.

Stelios has been selling down his easyJet shareholding for the last 18 months to help fund his other start-up ventures such as low-cost cruises, hotels and coach services and now holds a 16.9 per cent stake. His last share sale in February raised more than £14m.

Although he no longer has any direct involvement with easyJet, Stelios is deemed an "insider" because of the presence on the airline's board of Amir Eilon, a long-time friend and financial adviser. Mr Eilon has already made more than £4m from easyJet share options and until recently also sat on the boards of several other Stelios companies.

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