EasyJet has begun to suspend the voting rights of some of its shareholders to restrict controlling interest by investors outside of the EU to 49.5%, according to Reuters.
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EasyJet (EZJ) has held an Austrian operating license since 2017 but is currently 52.65% owned by non-EU shareholders, meaning that certain changes need to be made in order for it to comply with post-Brexit airline ownership rules.
EasyJet said on Monday that shareholders holding more than 3% of shares would have to forfeit some of their voting rights. “The voting rights suspension is being applied on a ‘last in, first out’ basis such that the shares most recently acquired by relevant persons will have voting rights suspended first,” the company said in a statement.
EasyJet noted that the investor register will also be kept under review and it could start to force shareholders to sell their shares to EU nationals if non-EU ownership remains over the 49.5% maximum for a sustained period. (See EZJ stock analysis on TipRanks)
Citi analyst Mark Manduca downgraded EasyJet last week from a Hold to a Sell and lowered his price target from 750p to 650p. This implies downside potential of around 17% from current levels.
Commenting on the airline industry’s year-end prospects, Manduca said, “Fundamentally no one expected winter to be good…We knew it was going to be bad, it is bad, it just turns out it’ll be very bad.”
Overall, consensus among analysts is a Moderate Buy based on 5 Buys, 8 Holds and 1 Sell. The average price target of 885.61p suggests upside potential of around 14% over the next 12 months.
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