EasyJet PLC (LSE:EZJ) shares flew over 12% higher after US private equity firm Castlelake disclosed on Friday that it was considering a possible offer.
The FTSE 250-listed budget airline said it has not received an approach nor held any discussions with its apparent suitor, but its board "will consider any proposal, should one be made".
Directors stressed that their decision would focus on both valuation and the deliverability of a potential deal.
Castlelake's timing was described as "highly opportunistic", with recent months seeing easyJet's share price sinking to lows last seen three-and-a-half years ago after the conflict in the Middle East hit consumer confidence and jet fuel prices.
The airline also highlighted what it described as considerable regulatory, financial and execution challenges associated with any potential takeover.
EasyJet added that it remained in a strong financial position, with an investment-grade balance sheet and a net cash position, and remains focused on delivering its medium-term target of generating more than £1 billion of profit before tax.
On Friday afternoon, Castlelake put out a statement supposedly in response to media speculation, saying it was in the early stages of considering a possible offer for easyJet but said no approach had been made to the board.
The Minneapolis-based firm added that it holds a stake of approximately 2.14% in easyJet and, under the UK takeover code, "would be required to make an offer at no less than 403.23 pence per share".
But it stressed that there is no certainty that any offer will be made, nor as to the terms, with takeover rules defining the firm's 'put up or shut up' deadline as 5pm on 26 June 2026.
EasyJet advised shareholders to take no action yet.
The shares rose 12.4% to 447.14p in early trading on Monday, back to where they were in early March but still down 13% since the start of the year.
** UPDATE: Adds share price **