Stelios hint propels easyJet higher

Stelios Haji-Ioannou, the founder of easyJet, refused yesterday to rule out a sale of his pivotal stake in the low-cost airline, helping send shares in the company through the 400p barrier for the first time in more than three years as takeover speculation continued to mount.

His move followed confirmation over the weekend that the Luton-based carrier has appointed Goldman Sachs to lead its defence against a possible bid from FL, the Icelandic company that owns Icelandair and now holds a 16.2 per cent stake in easyJet.

In an e-mailed statement, Mr Haji-Ioannou, whose family owns 40.5 per cent of easyJet, said: "I am not any closer to selling to anyone, I still think the stock has more potential. As owner of the brand, I care who will be the licensee of the easyJet brand but I just haven't done enough work to decide if the FL group would be OK or not."

Stelios declined to elaborate but sources close to the Greek-born entrepreneur said he saw himself as a long-term seller of easyJet shares whereas a year ago the speculation centred on whether he was planning to take the airline private once again.

The key question is the price at which Stelios would be prepared to sell, with some observers suggesting he would have to be offered more than 500p a share for his stake. That would value the airline at £2bn.

Shares in easyJet closed 7.5 per cent higher last night at 408.25p, valuing the company at £1.63bn. Three times the normal daily volume of stock changed hands.

Mr Haji-Ioannou holds a 16.6 per cent shareholding in easyJet worth £270m at the current share price whilst his brother and sister each own 12 per cent stakes.

Easyjet's articles of association prevent non-UK shareholders from owning more than 45 per cent of the airline while European Union rules stop non-EU investors holding more than 49 per cent of an EU airline. But FL already owns enough shares to call an extraordinary meeting to overturn the 45 per cent rule while Iceland, as a member of the European Economic Area, is exempt from the restrictions on non-EU ownership.

FL has described its easyJet holding as a strategic investment but it also has on its board Jon Asgeir Johannesson, the Baugur founder who has expanded aggressively into the UK retail sector and now controls a string of well-known high street brands including Iceland, Hamleys, Mappin and Webb, Whittards and Karen Millen.

Mr Haji-Ioannou has the power to re-instate himself as easyJet's chairman providing he owns more than 10 per cent of the airline. Even if he sold out entirely, he would still own the easyJet brand, meaning that he could continue to exert influence over any new owner of the airline who took over as licensee.

The licensing agreement was put in place at the time of easyJet's stock market flotation in November 2000 to protect Mr Haji-Ioannou's ownership of the "easy" brand, which is now applied to 15 other ventures ranging from car hire and hotels to cruise ships and cinemas.

The Icelanders began their stake building in November 2004, buying a 10 per cent shareholding. They then bought more shares between August and October of last year, which is when easyJet's chairman, Sir Colin Chandler, began the beauty parade to select a new financial adviser to replace Credit Suisse First Boston.

Andy Harrison, who took over as chief executive last month, is to return to the UK today from a short skiing holiday in France and has been kept in constant touch with developments. The airline meanwhile announced an 11 per cent rise in passenger numbers for December, in line with expectations, taking the total for 2005 to 30.3 million, 17.8 per cent up on 2004.