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Middle East situation is weighing on all SH carriers today. This is more general market stuff than anything to do with the takeover

Wait and see

What is hilarious on the valuations, it doesn’t include the slot portfolio, that could be easily worth double the price of the aircraft if they were to dispose of it fully. Even assuming a shift of 25% of the value of the slot portfolio, we are still looking at 1-1.5 billion on top. Any companies joining the bid will be looking for both metal and the slot pair portfolio.

So, what happens if the shorts don't close? Surely rather than being forced to close, they instead wait for the final offer to go through. lets say that is at 600p as a thought experiment. Rather there being a short squeeze, in this scenario, the short position is only closed at the final bid position.

If this is the case, this changes things somewhat. It would explain why the shorts are not closing, as their liability is limited by the offer and market liquidity wont impact - which effectively means we wont necessarily get a short squeeze in the run-up to takeover. Or have I got this wrong? Do the short sellers need to have the physical paper to close their short position and submit these to the bidder and therefore, a takeover provides a book-end and a potential squoze?

Uncrossing trade closed slightly ahead of market at 465.30 vs close of 462.70 with a slightly raised volume of 4.11 million shares.

Im waiting for the shorts to start to go. Declared shorts at 5.7% (Institutions with substantial positions) with I reckon a few more Retail holding shorts taking this up to (probably) >8%.

What i'm finding fascinating is that the short positions are not growing; if there were any sentiment that this bid is unrealistic, short interest would be growing. Also interesting that Blackrock have a net positive position - I wonder if they have 2 segregated trading desks taking counter positions, or if this is some form of Arb for exposure elsewhere?

Have a look at how Castle have handled SAS and it will become clearer. They are ninjas at this; Saw this coming 2-3 months out, which is why its been my biggest holding and why ive added another 15% in the last 48H

Below should read massive increase in UT volume sorry

So, one question I can’t find the answer to. Is a massive increasing in UT a bearish or bullish signal? Or does it depend on the relative close vs open price? Any takers on an ELI5 response appreciated!

Trev, I asked perplexity an ELI5 question on this, as I’m quite confused also. The sketch is this (quite a good response I thought!)

Why Form 8.3s Flood In

Once a company is formally “in an offer period” under the UK Takeover Code, Rule 8.3 mandatory disclosure obligations kick in for all significant holders:[hw-ext.funds-axis]

• Any person holding 1% or more of easyJet’s relevant securities must file an Opening Position Disclosure by no later than 3:30pm on the 10th business day after the offer period begins[corporate.easyjet]

• After that, any dealings in EZJ shares by those persons must be disclosed via a Form 8.3 no later than 3:30pm the next business day[hw-ext.funds-axis]

• This applies to institutional investors, funds, and any party with a material interest — hence filings from institutions like M&G / M&G Investment Management appearing immediately

Cheek of Dooshe bank! Sell with a target price of 340!

Stop giving the shorters hope Doosh bags!

From reported FT news this morning:

https://www.ft.com/content/477976eb-ba78-4eb9-bb2f-7f0ece80448f?syn-25a6b1a6=1

"Castlelake to hunt partner on easyJet bid to navigate EU ownership rules"

Castle isn’t some tin pot outfit - they manage over 30 billion in equity. They aren’t going to get done for market manipulation and risk their licence to grab a quick 10-20% uplift on their 2%.

Was aware of the limit before the offer went in- chatted on it yesterday on the Jet2 page as to potential mechanisms for castle to manage this restriction.

My take on this - someone leaked the prospective bid early, knowing that it put the ball in Castles corner. Silence after Friday would have led to massive speculation, so their comms lady put out 2 holding statements, both are required in regulation. You could tell from the statements that castle have been pipped to comms on this - it was the bare minimum they could legally declare without giving the game away. They are obviously interested, otherwise they wouldn’t have tried to keep the chatter down by stating they may not enter a bid. They have also not stated they are not entering a bid either.

They now have to put together a bid over the next 25 days - not long really… with this now out in the open, it’s going to cost them somewhat. I reckon we will land in the 700-750p range as a start. Anything less won’t wash. If their offer falls through, we may see others come in here and strike whilst the iron is hot.

Barclays have just chirped like a canary in a coal mine. The market and retail just woke up to what we have been saying for 4 months. EasyJet is massively undervalued. Hopefully there will be increased interest from the US where value and potential is recognised. This is a value stock to beat no other at the moment.

They could go in with a European private equity bidder owning 50.1%

Perhaps stelios and private equity cash to de-list? That’s my punt.

It’s back up to pretty much the point of purchase. Could have gone one of two ways today. That it has held to within 3p of open indicates this should maintain support until further announcements. My bet here is that we will see a resolution in the ME before the deadline on the 26th June. This will pop when it does. Plus, as I’ve bored people before, a Squoze is coming. If it does, I’ll be sending the blackrock marketing team a bottle of fizz to say thanks for the cash.

Putting money on it... I think we will see a few RNS and notices of reductions in Short positions on 1 June over the next week. I think Trump and Binni have handed the shorts a potential offramp that is less-bad than the expectation. The buy/sell ratio went a bit crazy toward the end of the session.

Solomon, not true, this is what it says:

any potential offeror identified in the announcement must make a further announcement specifying the matters referred to in Rule 2.4(c)(iii) and (iv) (as appropriate) as soon as practicable thereafter.

C Iv reads:

details of any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert to which the offeree company or a potential offeror identified in the announcement is a party. See also Note 6(b) on Rule 8.

The definition of in concert includes:

Persons acting in concert comprise persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control (as defined below) of a company or to frustrate the successful outcome of an offer for a company. A person and each of its affiliated persons will be deemed to be acting in concert all with each other (see Note 2 below).

My take on the Iranian President - He is the one moderate that if resigns, opens up the door to the lunatics. I suspect that the blocker to negotiation at present is the IRGC refusal to give ground. There is no official confirmation he has resigned - he may have handed in his registration, but until the Turban in Chief accepts it, he is stuck with the gig. It could well just be further misinformation; the source was "Iran International" who dont particularly like the regime.

Competitions commission would say hell no.

So, im involved in the industry (not at Ezy). There has been a long chat about just that. There are already 2x AOC registered, one European, another UK registered.

A concert party would only be disclosable once the bid has been made - it hasnt yet. I get the impression that someone has pulled the rug from under castle's feet here- you can tell from the Comms that they weren't ready for public disclosure (especially their 2x releases in quick succession this morning). Doesn't damage much though and Easy has been slim pickings for an aggressive takeover for a year now.

They have confirmed that a takeover is being considered. JPM - vile vampire squid co has confirmed its a potential go-er, they will have known that EU airline competition law prevents more than 49% external ownership (This is Castle's bread and butter after all)

QED - there has to be a European party involved here also, that is yet to disclose. It has to be someone or a business that is acceptable for both competitions and government regulators and they have to have a lot of cash to hand and is registered inside of the UK. Stelios leading makes the most sense, may not be in airlines, but likely to be leisure travel - perhaps that cruise company? Lots of liquidity looking for a home at the moment globally and in London.

Lets just wait and see but I place more credence in the potential here than I think retail is giving it.