Source: Sharecast
EasyJet shares surged in early trade on Tuesday following a report in Italy’s Corriere della Sera that MSC was working with an investment fund on a possible investment in the airline.
The shares initially pared gains after MSC told Reuters it was not considering any such move, but they quickly shot higher again.
"MSC denies any involvement in this matter," a spokesperson told Reuters.
At 1120 BST, easyJet shares were up 5% at 487.40p.
Dan Coatsworth, head of markets at AJ Bell, said: "EasyJet is no stranger to takeover rumours and the longer its shares trade on a cheap valuation, the louder the bid speculation could get.
"Talk that shipping group MSC is potentially interested in buying the business put a rocket under easyJet’s shares in early trading. MSC has since played down those reports, but markets rarely move on and focus on something else when there is bid talk.
"Investors will now think long and hard about who might want to own easyJet. That explains why the shares are still trading higher despite MSC denying any involvement."
Coatsworth said there is some logic to MSC owning easyJet, even if it looks like an odd match at first glance.
"MSC is involved in air cargo so already has a foot in the aviation industry," he said.
"Where the two companies closer align is in serving a consumer audience. MSC has a cruise business and might take the view that EasyJet is a cheap way to expand into other parts of the consumer leisure market.
"EasyJet is a big name in low-cost travel, and it has a fast-growing package holidays arm. Bolt those together with a cruise business and you’ve got the right ingredients for a bigger beast in the leisure industry.
"EasyJet’s board and shareholders might not see it that way. The business is growing perfectly well without needing to dip its toe in the cruise space. EasyJet is all about getting people from A to B without breaking the bank. While MSC is at the more affordable end of the cruise market, it feels like a step too far for EasyJet to want to enjoy life at sea.
"EasyJet founder Stelios Haji-Ioannou and his family remain the largest shareholders in the airline, owning 15.27%. Haji-Ioannou’s EasyGroup already has a cruise business - unsurprisingly, called easyCruise - meaning that easyJet had a natural acquisition target if it was desperate to set sail in a new sector."
