FL Group to acquire EasyJet? Skip to content

FL Group to acquire EasyJet?

“Anything can be bought” said FL Group chairman Hannes Smarason when TV-station Stod 2 yesterday asked him to respond to the comments of EasyJet’s founder and controlling shareholder, Stelios Haji-Ioannou, that Haji-Ioannou’s 40 per cent stake in the company was not for sale.

FL Group started acquiring EasyJet shares in October of last year. FL Group announced Tuesday that it had added another 1.51 per cent, bringing its stake up to 13.01 per cent.

FL Group’s intentions are the subject of considerable speculation. In July, CEO of FL Group subsidiary Icelandair, Jon Karl Olafsson, said in an interview with the British daily the Scotsman: “We think it [EasyJet] is a well-run business, but there is not a lot in common between Icelandair and EasyJet and we are not looking to be in a merger. It has been a good investment that has been paying off already.” FL Group quickly responded by issuing a press release stating that Jon Karl’s comments “did not represent the FL stance on its investment”.

Last November, shortly after FL Group’s initial purchase, Haji-Ioannou said to the Daily Telegraph that he was “keeping an eye on EasyJet”.

“I have made it very clear that I will not sell at easyJet’s current share price. I will always keep a stake in easyJet, but I have not said how big,” he said to the Telegraph.

And he added that he would not support a takeover of the airline unless he was “assured that the buyer [would] not do anything that would tarnish the ‘easy’ brand”. EasyJet licenses its brand from Haji-Ioannou’s company, EasyGroup.

“I am not about to sell out to any Tom, Dick or Harry,” he said in November, adding “I am puzzled about where he [FL Group chairman Hannes Smarason] gets his funding from”.

A number of big-ticket, high-profile acquisitions by Icelandic companies in the UK and elsewhere have provoked speculation about where the Icelandic raiders are getting their money from. This spring and summer, several British publications, including both the Financial Times and the Guardian, reported on rumors that the raiders were being financed by Russian money.

Three Icelanders who operated a brewery in St. Petersburg in the 1990’s, purchased a controlling share in Icelandic bank Landsbanki in 2002. One of them, Iceland’s first dollar billionaire, Bjorgolfur Thor Bjorgolfsson, has recently denied having any ties the Russian mafia in an interview with the Danish daily Berlingske Tidende. Another, Magnus Thorsteinsson, has since rapidly built up Iceland’s largest aviation company, Avion Group, through a number of acquisitions. The third, Bjorgolfur Gudmundsson, is now chairman of Landsbanki.

According FL Group’s website, Landsbanki is now the second largest shareholder of FL Group; it owns 32 per cent of the shares. According to a statement issued earlier this summer by Landsbanki, several individuals and companies, including Icelandic investment company Baugur, have entered into forward agreements to acquire the shares owned by Landsbanki. Hannes Smarason’s business partner, Baugur CEO Jon Asgeir Johannesson, recently joined FL Group’s board of directors.

Over the past few months, Icelandic budget airline Iceland Express acquired the Danish airlines Sterling and Maersk Air. At the beginning of August, Icelandic media reported that the owners of Iceland Express had also picked up a 11 per cent stake in the Swedish budget airline Flyme. One of Iceland Express’s owners, Palmi Haraldsson, is a long-time business associate of Jon Asgeir Johannesson.

Yesterday FL Group chairman Hannes Smarason, a former McKinsey consultant and ex-Chief Business Officer of biotech company deCode Genetics (Nasdaq: DCGN), said to Stod 2 that he had “great interest” in EasyJet and did “not exclude the possibility of a takeover”. Haji-Ioannou may not sell to “Tom, Dick and Harry”, but perhaps he’ll sell to Hannes, Jon Asgeir and Bjorgolfur instead?

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