EasyJet shares fell sharply in London trading as investors digested reports that the European Commission is considering an antitrust investigation into the ongoing battle for control of the UK low-cost carrier.
The sell-off marks a sudden reversal in sentiment for the airline, which has seen its stock price surge in recent weeks on speculation that US investment firm Castlelake could force a strategic overhaul or breakup of the business.
The prospect of EU regulatory scrutiny introduces a significant new variable into the takeover contest.
If the Commission opens a formal probe, it could delay or block any transaction that alters the competitive landscape of European aviation, particularly if the deal involves divestitures or changes to slot allocations at congested airports.
For traders, the risk of regulatory intervention undermines the near-term catalyst that has driven the stock higher.
This development follows a period of intense volatility for EasyJet.