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Investing.com -- EasyJet PLC (LON:EZJ) shares are rallying on Tuesday following unconfirmed media reports of possible bid interest from shipping company MSC.
The budget airline’s stock was up 5% by 1014 GMT after initially soaring more than 7%. EasyJet shares declined 11% so far this year, compared with a 2% fall in the European travel and leisure index.
According to Corriere della Sera, citing market sources, maritime giant MSC Group, is considering a bid for Easyjet as part of a transport integration strategy. The acquisition would particularly benefit MSC’s cruise operations due to Easyjet’s strong position in key markets.
While analysts at Bernstein note that the industrial logic between a container shipping business and an airline is "non-obvious," they suggest a potential break-up scenario could be driving interest. MSC does operate a small cruise line and has air cargo activities, but these don’t present compelling synergies with a passenger airline.
Bernstein has long viewed easyJet as a likely acquisition target for European legacy airline groups, particularly due to its valuable slot portfolio at key airports. The airline’s slots would be especially attractive to network carriers like IAG, Air France-KLM, or Lufthansa, though regulatory remedies would likely be required in various markets.
A third-party acquisition followed by breaking up the airline could potentially circumvent some regulatory hurdles, but would face significant operational challenges. Splitting up the airline would require separating fleets, creating new air operator certificates, and dividing planning and management functions.
Any official acquisition move would value the airline at approximately £4 billion and would likely involve MSC partnering with an investment fund, similar to its previous transactions. Based on the current share price, the airline is valued at approximately £3.6 billion.
MSC previously acquired Italo high-speed trains with Global Infrastructure Partners and made port investments with BlackRock.
(Additional reporting by Maria Ponnezhath)