Stelios says: No 'current' plans to buy easyJet

EasyJet shares fell to an all-time low yesterday after Stelios Haji-Ioannou, the founder of the no-frills airline and its biggest shareholder, said he had no current plans to take the business private.

EasyJet shares fell to an all-time low yesterday after Stelios Haji-Ioannou, the founder of the no-frills airline and its biggest shareholder, said he had no current plans to take the business private.

Stelios, who together with members of his family still owns 41 per cent of easyJet, said that buying back the airline at this stage would be "an extreme measure", adding that he continued to support the board "at this time".

However, the serial entrepreneur and founder of easyGroup, who stepped down as chairman of easyJet two years ago, also said that he reserved the right to take a different line if there were a further deterioration in easyJet's share price. The same would apply if there were material changes in circumstances or if the board deviated from its plans to improve shareholder value.

Shares in easyJet, which had been underpinned by bid speculation, promptly fell 4 per cent to 143.75p - less than half their value at flotation four years ago - valuing the company at £575m. When easyJet floated in November 2000 at 310p-a-share, it carried a price tag of £1.24bn.

Stelios sparked speculation that he might launch a bid for easyJet just over a month ago by commenting that he did not want to comment "at this stage" when asked about a potential approach for the company. Two days later he said he wanted to "keep his options open" about a potential bid.

His remarks followed a second profit warning from easyJet within the space of five weeks, which the airline blamed on "unprofitable and unrealistic pricing" across the airline market. The airline said it expected fares to fall by about 10 per cent this summer, leaving profits for the current financial year only marginally above the £52m achieved last year.

In a statement from Stelios, made public to the Stock Exchange yesterday by easyJet, he blamed the media for reading too much into his comments. "There is no current plan on the part of easyGroup and my family to take the company private," it said. The statement added that Stelios and his brother and sister were, like any large shareholders, keen to protect their investments. "All sensible options are considered from time to time."

Stelios said he still had the contractual right to resume the chairmanship of easyJet but he would exercise this only "in extreme circumstances". The statement added: "My current view is clear, having discussed it with both the chairman and the chief executive of easyJet. I wish to work with and support the board and senior management in order to protect and improve shareholder value and I believe the board will be taking measures to achieve those ends."

A spokesman for easyJet declined to elaborate, although some information may be released alongside the airline's third quarter market update in early August. The airline is also close to bringing in a "heavyweight" investor relations manager to improve communi- cations with the City.