25th Oct 2007 07:01
easyJet PLC25 October 2007 easyJet PLC25 October 2007 EASYJET PLC AGREES TO ACQUIRE GB AIRWAYS LIMITED easyJet PLC ("easyJet") announced today that it has agreed to acquire theentire issued share capital of GB Airways Ltd ("GB Airways"), excluding itsslots at Heathrow Airport, from the Bland Group Limited, for a cashconsideration of £103.5 million. GB Airways is primarily a London Gatwick based point-to-point airline operatingto destinations across Southern Europe and North Africa under a franchiseagreement with British Airways PLC ("British Airways"). It serves 31destinations and operates 15 Airbus aircraft (9 A320s and 6 A321s) with anaverage age of 4.1 years, which are complementary to the easyJet fleet of 107A319s. In total it operates 39 routes - 28 from Gatwick, 6 from Manchester, 5from Heathrow. Based upon its statutory accounts under UK GAAP for the year ended 31 March2007, GB Airways reported profit before tax of £2.6 million and EBITDAR of £35million on revenues of £250 million; it carried 2.8 million passengers; hadgross assets of £182 million and net assets of £33 million. The acquisition of GB Airways is consistent with easyJet's expansion strategyand, importantly, strengthens its customer offering at Gatwick, the airline'sbiggest base which has a highly attractive catchment area in London and SouthEast England. The purchase adds valuable take-off and landing slots at Gatwickand the opportunity to accelerate easyJet's route development. Following theacquisition, easyJet will operate 24% of Gatwick's slots and will flyapproximately 8 million passengers across 62 routes from Gatwick. By Winter 2008/09, GB Airways will be fully consolidated into the easyJetbusiness model, releasing cost savings. The acquisition will be positive toeasyJet's earnings per share and return on equity in easyJet's current financialyear, before one-off integration costs. easyJet anticipates GB Airways' seatprofitability reaching a similar level to its own at Gatwick in the first fullfinancial year of operation. Andy Harrison, Chief Executive of easyJet, said: "This is an acquisition which both strengthens our customer offering at LondonGatwick, our biggest base with an attractive catchment area, and allows us tofully capitalise on the potential of the airport through a larger number ofslots. The deal will bring major benefits to both easyJet and GB Airwayscustomers, delivering a wider choice of destinations at easyJet's great prices,and creating clear value for our shareholders. We expect the acquisition to beearnings positive in our current financial year and in the longer-term we willtransition the GB Airways operation to easyJet's cost base and operating marginlevels. We expect to achieve both cost and revenue synergies as we expand ourbusiness at Gatwick." easyJet will co-operate with British Airways to ensure a smooth and orderlytransition for customers. To this end GB Airways will continue to operate allroutes under the British Airways brand until March 29th, 2008 after whichflights will operate under the easyJet brand. Kevin Hatton, Chief Executive of GB Airways, said: "The sale agreement brings to an end a period of uncertainty about the futuredirection of our company. We are pleased that the business and customer basebuilt up by GB Airways will now be secured and strengthened under the ownershipof the UK's largest airline by passenger numbers, and one of the industry's mostpowerful brands. We will fulfil our outstanding obligation as a franchisepartner to British Airways and then look forward to a smooth operational mergerwith easyJet." The total consideration of £103.5 million is payable in cash of which £11.5million is held in escrow as security for any claims under the acquisitionagreement. GB Airways' Heathrow slots will be exchanged under three separateagreements, the consideration for which will be passed on to the Bland Group(net of costs) on receipt. Completion is subject to the usual conditions,including approval from the relevant regulatory authorities. The transaction isexpected to complete no later than 31st January 2008. ENDS A presentation can be viewed in the Investor Relations section of easyJet.com There will be an analyst and investor conference call at 08.30 today. Forfurther details, contact Katie Millett at Financial Dynamics on +44 (0) 207 2697153 or email [email protected]. Enquiries For further details please contact: Andrew Barker, Investor Relations +44 (0) 1582 525 982 Toby Nicol, Corporate Communications +44 (0) 1582 525 339 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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