EasyJet’s board has indicated it intends to recommend a £5.7bn all-cash offer from Apollo to shareholders, valuing the airline at £7.15 per share. This development marks a reversal from the board’s earlier position taken earlier in the week, when it had agreed in principle to accept a competing proposal from Castlelake valued at £5.5bn, or £6.90 per share.
The board concluded that Apollo’s financial terms represent a level it would be prepared to recommend. Under the Apollo proposal, current shareholders retain the option to remain invested in the company following its delisting, rather than being forced to exit their positions as would be required under the Castlelake arrangement. The airline’s founder, Stelios Haji-Ioannou, who maintains ownership of more than 15% of easyJet alongside his family, stands to receive approximately £855m should he elect to sell his stake at the Apollo valuation. Apollo has indicated it intends to maintain the existing brand licence agreement with Haji-Ioannou, under which he continues to receive royalties from the airline.
Apollo has signaled its intention to preserve easyJet’s current management structure and strategic direction, stating it believes in the low-cost carrier model and plans to support initiatives including fleet modernization and expansion of ancillary revenue streams. The company acknowledged the contributions of management and employees to easyJet’s performance. Apollo has until 7 August to submit a formal offer and committed to taking necessary steps to satisfy EU regulations requiring European airlines to maintain majority ownership by investors within the region.
Castlelake responded to the development by stating it would consider its options and provide further updates as appropriate. The competing bidder had previously partnered with two investors to address regulatory requirements. Stock market reaction to the Apollo announcement was positive, with easyJet shares rising 14% following the board’s signal of support for the higher offer. Apollo has prior experience in aviation investments, including work with Virgin Atlantic, Sun Country Airlines, and various other carriers and aviation-related operations.
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