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Shareholders back Easyjet's fleet expansion

07/11/2013 | Reuters

LONDON (Reuters) - EasyJet (EZJ.L) can continue with its plan to buy 135 new Airbus (EAD.PA) planes after shareholders backed the deal on Thursday, defeating a move by the group's estranged founder to block it.

Easyjet said investors representing 57 percent of its shares voted in favor of the move to buy 35 A320 aircraft and 100 new A320neo jets, with options for a further 100, at a meeting in Luton, north of London.

The deal was so large it was subject to a shareholder vote, where it had to be approved by investors representing more than 50 percent of the company's shares.

EasyJet's estranged founder Stelios Haji-Ioannou had said he would vote against the fleet expansion after arguing the deal would destroy shareholder value and that the money would be better spent on improving returns to investors through dividends or share buybacks.

Haji-Ioannou, better known as Stelios, founded easyJet in 1995 but quit the board in 2010 after a row over strategy.

"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," the group's Chairman John Barton said.

Stelios still has a 37 percent stake and frequently disagrees with the airline on fleet expansion, executive pay and dividend policy.

EasyJet had defended the deal, saying it had negotiated a "very substantial" discount for the jets, which have a list price of around $12 billion.

Two thirds of the new planes will be used to replace its ageing 156-seat A319s, the bulk of its fleet, the airline said.

Details of the deal were revealed by Reuters in June after Easyjet entered exclusive talks with Airbus, dealing a blow to its U.S. rival Boeing (BA.N).

(Reporting by Kate Holton; Editing by Elaine Hardcastle)

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