easyJet Takeover Bid Doubles Investor Returns and Puts IAG in Focus

The agreed easyJet takeover bid, struck at 715p per share, has crystallised what value investors in UK equities have been arguing for years: London-listed stocks have been trading well below what strategic buyers are prepared to pay. For anyone who bought EZJ in May at 339p, the deal represents a return of more than 100% in under six months.

From a sub-6 P/E to a takeover premium

Earlier this year, easyJet was changing hands at a price-to-earnings ratio of below 6, placing it among the cheapest names on the London Stock Exchange. The setup was not without risk. Airlines were facing fuel-cost pressure from geopolitical tension in the Middle East, and consumer spending remained uncertain. Even so, the valuation looked hard to justify for one of Europe’s better-established budget carriers.

Two prospective buyers evidently agreed. After a competitive process, a 715p-per-share offer was agreed, against a May price of 339p. The arithmetic is straightforward: a buyer at the low more than doubled their money before the year was out.

The easyJet takeover bid as a wider signal

This deal does not sit in isolation. The FTSE 100 has seen five completed or agreed takeovers in 2025 alone, and the index continues to trade at a material discount to the S&P 500 in absolute terms. Where public-market valuations are low enough, corporate buyers will eventually do what retail investors could not be persuaded to do: buy.

With EZJ now effectively off the table pending completion early next year, attention turns to what else in the sector looks comparably priced. IAG, owner of British Airways and the FTSE 100’s only remaining listed airline, trades at a P/E of 8.26, despite a share price that has risen 370% since 2022 as pandemic-era travel demand recovered in full.

IAG carries a different risk profile from easyJet. Its exposure to long-haul and business travel makes it less vulnerable to a consumer squeeze than a pure budget operator, but more sensitive to any renewed softness in corporate spending. The premium-route mix is a hedge in some scenarios and a liability in others.

Whether IAG attracts a bid is speculative. What is less speculative is the pattern: when blue-chip UK companies trade at single-digit earnings multiples, the question is not whether someone will notice, but when. The next test for that thesis is how many more names on the index are still priced as though nobody has.