Icelandic investment group FL has sold its 16.9 per cent holding in budget airline easyJet to earn a £97.9 million profit, ending months of spec-ulation it was eyeing a takeover of the carrier.
Shares in easyJet, which hit three and a half year highs in February on takeover speculation, yesterday slid as much as 11 per cent in reaction to the announcement.
"We are always looking to maximise our investment and this was the right time to realise a profit in easyJet," FL chief executive Hannes Smarason said, noting that easyJet shares had tripled since the firm first bought into the airline two years ago.
The airline hired invest-ment bank Goldman Sachs as an adviser in January as its stock surged amidst speculation it was defending itself against a possible takeover.
FL had been rumoured to be considering a bid for the airline after it raised its stake last year above 16 per cent.
Founder Stelios HajiIoannou said in March the group had not made him an offer, but admitted they had met.
Mr Haji-Ioannou, who owns 16.6 per cent of the airline, while his brother and sister own about 12 per cent each, had insisted their stakes were not for sale at the current share price.
Mr Smarason said FL's share listing last year allowed the group to broaden its investment focus and the easyJet sale was prompted primarily by other opportunities. The company said it had liquid assets of £420 million, giving it considerable investment capacity, and that its own financial position remained very strong.
"We are working on several interesting investment projects and the sale gives us the opportunity to look at more and of greater scale."
The group said concerns over the Icelandic economy, which prompted rating agency Fitch to lower its outlook for Icelandic debt to negative in February, did not take fully into account the assets that have been acquired by Icelanders abroad.