Vote closes chapter in months-long bitter feud between management and main investor
Shareholders of discount airline EasyJet voted to approve a $13 bn purchase of 135 Airbus SAS jets, taking the side of company executives in an increasingly bitter and damaging dispute with company founder Stelios Haji-Ioannou, who has publicly argued against the purchase.
Investors voted 57 percent for the planned purchase of 35 jets and the option to buy 100 more later, the company says in a note to shareholders on its website. Some 85 percent of the shares, or a total of 337,888,117, were voted.
‘The vote in favor of our new fleet arrangements will allow EasyJet to continue its successful strategy of modest, profitable growth and sustainable returns for our shareholders,’ John Barton, chairman of the airline, says in a company statement.
The planned purchase, plus the option for the additional 100 planes, will allow EasyJet to replace 85 ageing aircraft and the rest will expand the company’s carrying capacity at between 3 percent and 5 percent a year. Overall, the deal gives EasyJet the ability to expand its fleet to 298 or shrink it to 165 by 2022, ‘depending on economic conditions and opportunities available,’ the company said in a statement on June 18.
Haji-Ioannou, whose family owns about 37 percent of EasyJet shares, has waged an increasingly bitter and public campaign against management plans in recent months, and has recently threatened to hold management financially accountable if the purchase proves financially harmful. He has sold some of his shares this year and has repeatedly threatened to sell more if the purchase order goes through.
‘We believe this is an unnecessary order, with EasyJet's very young fleet,’ Haji-Ioannou, who is mainly known simply as ‘Stelios,’ said after the vote in a statement through his spokesman, according to the Guardian. ‘We are concerned that new aircraft will be used to chase passengers on low-margin routes.’
Both Haji-Ioannou, the company’s largest investor, and management lobbied major investors ahead of the vote in an effort to sway the outcome. Before the vote, however, Haji-Ioannou predicted the purchase order would be approved.
In February of this year, EasyJet shareholders also rejected repeated calls by Haji-Ioannou to oust Mike Rake, who then held the position of chairman. Investors voted 55.6 percent in favor of re-electing Rake at the general shareholders meeting. Rake, who had announced plans to step down even before the vote, was replaced by Barton, the chairman of retailer Next, in May.
