A bidding war has erupted for easyJet after US private equity firm Apollo tabled a higher offer than rival Castlelake, prompting the airline's board to reverse course and signal support for the new proposal.
Apollo's all-cash bid values the budget carrier at 7.15p per share, totaling £5.7bn. The easyJet board said Friday it was "minded to recommend" the offer to shareholders, a dramatic reversal from its earlier decision this week to back a Castlelake deal worth £5.5bn at 6.90p per share.
The board's unanimous endorsement of Apollo's terms came with a formal statement that it was "no longer minded to recommend" the Castlelake proposal. Share prices reflected investor enthusiasm for the competing bids, jumping 14% on Friday morning.
The shift leaves Castlelake, which had raised its offer five times in pursuit of the airline, suddenly sidelined. The US private equity firm had earlier secured commitments from co-investors including Peter Bellew, former chief operating officer at Ryanair and easyJet, and Mark Breen, CEO of Dublin-based Oneiros Aerospace. Their involvement was designed to satisfy EU regulations requiring European airlines to maintain majority ownership by regional investors.
Apollo faces the same regulatory hurdle. The firm said it would "take all necessary steps" to comply with European ownership rules and made a "best endeavours" commitment to satisfy other regulatory conditions. Apollo has until August 7 to submit a formal offer.
The battle carries particular implications for easyJet founder Stelios Haji-Ioannou, who owns over 15% of the company alongside family holdings. An Apollo victory at the current bid level would deliver him roughly £855m if he chose to sell his stake. The proposed deal structure allows existing shareholders to remain invested after the airline delists, rather than forcing divestment.
Apollo has committed to preserving easyJet's existing brand licence agreement with Haji-Ioannou, under which he receives ongoing royalties. The founder has not publicly commented on the takeover attempts.
The private equity firm signaled operational continuity, pledging to back easyJet's current strategy and management team. In a statement, Apollo emphasized its belief in "the existing strategy of evolving and strengthening the low-cost carrier model," citing fleet upgrades, expanded ancillary services, and growth in holiday offerings as strategic priorities.
Apollo said it places "high value on people" and views retention of key staff as "paramount importance." The approach contrasts with typical private equity takeovers, which often involve significant restructuring or asset sales.
Apollo's aviation credentials span multiple regions and deal types. In November, the London-based firm completed a $745m financing of Virgin Atlantic's valuable slot portfolio at Heathrow. The firm has previously invested in Sun Country Airlines, AeroMexico, Atlas Air, and Swissport. During the Covid pandemic, Apollo provided 2.5bn euros in financing to bolster Air France-KLM's balance sheet, and in 2022 supplied $700m to support Scandinavian Airlines' restructuring.
Author James Rodriguez: "Apollo's higher bid and willingness to keep insiders as stakeholders may prove decisive, but regulatory approval remains the real battle here."
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