Shares in easyJet surged nearly 10% after the airline agreed to a £5.5bn takeover at the fifth attempt, but analysts said that it showed UK firms were being bought on the cheap.

The low-cost carrier’s board will recommend shareholders accept an offer price of £6.90 a share from Castlelake, a US private equity firm, after rejecting four previous bids of as little as £5.60 per share. EasyJet shares closed at 610p.

Castlelake will have to table a formal bid by 3 August under City takeover rules.

It signalled it would back easyJet’s current strategy and was not looking to break up the company in a joint announcement from the airline and its putative new owners on Sunday evening.

EasyJet said that in discussions, Castlelake had “emphasised its tremendous respect for easyJet and its people, along with its intention to support its future growth and transformation to a stronger, more resilient European airline for the benefit of all stakeholders if the transaction proceeds to completion”.

It said Castlelake was “supportive of easyJet’s fleet modernisation programme, which it regards as central to the company’s long-term competitiveness, efficiency and sustainability objectives”.

The latest offer also allows current shareholders to remain invested under Castlelake’s ownership should the deal proceed, rather than being forced to divest when it delists.

The airline’s largest single shareholder, its founder, Stelios Haji-Ioannou, who still owns about 15% of the company along with his family, has yet to comment publicly on the bid.

City analysts said the deal would raise more concerns about London-listed UK firms being picked off by foreign buyers.

The brokerage firm XTB’s research director, Kathleen Brooks, said “an iconic British aviation name” would be put in US hands. “This deal is symbolic, as it suggests a lack of stock market growth, and persistent underperformance of UK equities means that there is a massive for sale sign above UK corporates,” she said.

The chief investment commentator at the financial services firm Raymond James, Garry White, said: “The number and size of takeover bids from overseas buyers suggest that many UK-listed companies remain significantly undervalued. It is clear UK companies are currently being sold off on the cheap.”

Andrew Lobbenberg of Barclays, however, said the bid price was “offering good value to shareholders” as well as an opportunity for Castlelake, with markets tending to undervalue firms ahead of large capital investment.

“We do not expect a radical change in the business plan of easyJet. We expect that Castlelake will continue to develop the holidays business and grow the airline modestly,” he said.

EasyJet, which has its headquarters at London Luton airport but is predominantly based at Gatwick, employs 19,000 people and flies about 93 million passengers a year. Its shares had fallen by about 30% in the past year before Castlelake’s bid interest emerged.