Easyjet looks set to fall into foreign hands following a takeover offer worth more than £5billion from American raiders.

The budget airline, set up by Sir Stelios Haji-Ioannou in 1995, said it has reached ‘an agreement in principle’ with US investment firm Castlelake.

Shares in Easyjet jumped by over 10 per cent to 614.5p at the open.  

The proposed deal will raise fears over jobs and air fares as the industry reels from the soaring price of jet fuel and subdued demand in the wake of the Iran war.

The bid for Easyjet will also present a test for would-be Prime Minister Andy Burnham amid mounting concern that overseas predators are snapping up British firms on the cheap.

Other companies targeted by foreign buyers include historic ingredients firm Tate & Lyle, Lloyd’s of London insurer Beazley, two-century old City institution Schroders and the owner of William Hill.

The frenzy of takeover activity threatens to strip the UK of some of its most successful companies and leave the London stock market in disarray.

Castlelake has been pursuing Easyjet for weeks and has seen four bids rejected, with the airline’s bosses branding previous proposals ‘highly opportunistic’ and accusing the American firm of trying to secure a deal ‘on the cheap’.

But the Easyjet top brass said it was ‘minded to recommend’ a fifth offer from Castlelake that values the company at £6.90 a share or £5.2billion.

Castlelake now has until 5pm on August 3 to table a firm offer for the airline.

‘There can be no certainty that any firm offer will be made,’ the companies said in a statement last night.

However, it now seems likely that a deal will be done, with Easyjet becoming just the latest household name to fall into foreign hands.

Easyjet has turned down bids from Castlelake worth £5.60 a share, £6 a share, £6.25 share and then £6.50 a share.

But its tone mellowed last week following the £6.50 a share offer – saying it still fell short of what was required while at the same time opening its books to Castlelake.

The Americans are through to see Easyjet as a good deal given its fleet of modern Airbus planes and prime landing slots at London Gatwick and London Luton as well as in Milan and Geneva.

Any bid is likely to require the backing of Easyjet founder Sir Stelios and his family, who still own a 15.3 per cent stake in the company.

Although the family has not commented publicly, sources last month told the Mail he was likely to accept an ‘eyewatering’ bid.

'It would need to be an eyewatering large price to persuade him and the family to sell,' the source told the Mail.