Apollo Global Management, a United States-based private equity firm, has entered into competition to acquire easyJet, the European low-cost airline, with a cash offer valuing the carrier at £7.15 per share. The easyJet board announced on Friday that it was “minded to recommend” Apollo’s proposal to shareholders, representing a total transaction value of approximately £5.7bn.
The board’s endorsement of Apollo’s bid marks a reversal from earlier in the week, when directors had agreed in principle to accept a competing offer from Castlelake valued at £6.90 per share, or roughly £5.5bn. Castlelake had revised its proposal multiple times in an attempt to secure board approval. However, the Apollo offer emerged as more attractive to the board, leading to the withdrawal of support for the Castlelake transaction.
Under Apollo’s proposal structure, existing shareholders retain the option to remain invested following any delisting of the company, a feature distinguishing it from typical private equity acquisitions. The airline’s founder and largest shareholder, Stelios Haji-Ioannou, who controls more than 15 percent of the company alongside family members, could realize approximately £855m should he elect to sell his entire stake at the proposed valuation. Apollo indicated its intention to maintain the existing brand licence agreement with Haji-Ioannou, which provides him with ongoing royalty payments.
Apollo stated that it plans to preserve easyJet’s current strategy and management structure, emphasizing the firm’s commitment to the low-cost carrier model and pledging to support efforts to upgrade the fleet, enhance ancillary services, and expand the holidays business. The company indicated that retaining key personnel would be a priority priority under its ownership.
The firm has a deadline of August 7 to submit a formal offer. Apollo acknowledged EU regulatory requirements mandating that European airlines maintain majority ownership by regional investors, stating it would take necessary measures to comply with these obligations. Castlelake indicated it would review its options in light of Apollo’s competing proposal. EasyJet shares increased 14 percent on Friday following the board’s announcement regarding Apollo’s bid.
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