EasyJet agrees to surprise takeover bid as rival US firm swoops in

EasyJet Accepts Takeover Proposal from Apollo Global Management

EasyJet has agreed in principle to a takeover proposal valued at £5.7 billion from US firm Apollo Global Management. The agreement follows the airline’s earlier acceptance in principle of an offer from another US investment firm, Castlelake, made several days prior.

EasyJet stated that Apollo’s proposal represented a superior outcome for shareholders compared with the Castlelake bid. The carrier indicated it was no longer minded to proceed with the earlier arrangement. EasyJet operates as one of Europe’s larger airlines, employing more than 19,000 people and serving approximately 1,200 routes across 35 European countries. It was established in 1995 by Sir Stelios Haji-Ioannou to provide lower-cost flights within Europe. Together with other operators such as Ryanair, the airline contributed to changes in UK air travel patterns. Its initial services began in November 1995 on routes from Luton to Glasgow and Edinburgh, with international flights added the following year. The Haji-Ioannou family retains ownership of roughly 15 percent of the airline’s shares.

Under the Apollo proposal, shareholders would receive £7.15 per share. This compares with the £6.90 per share offered by Castlelake. Castlelake did not issue a comment on the development. Market analysts have noted that EasyJet holds appeal for potential acquirers because of its profitability, its aircraft fleet size, and its possession of take-off and landing slots at airports including Gatwick and Paris Charles de Gaulle. Such slots have been traded between airlines at values reaching tens of millions of pounds.

Susannah Streeter, chief investment strategist at Wealth Club, observed that Apollo appeared to be focused on EasyJet’s longer-term prospects. She noted that while the airline has faced higher fuel costs and geopolitical factors affecting travel, it maintains a European network, a solid balance sheet, and an expanding holidays division. Streeter stated that package holidays tend to produce higher margins and steadier revenue streams than airline tickets sold separately. She added that passengers would continue to experience normal operations, with flights, bookings, and loyalty programs remaining unaffected during any regulatory review of a transaction.

The statement from EasyJet does not constitute confirmation that a transaction has been finalized. Apollo has until 17:00 on 7 August to submit a firm offer or withdraw. Castlelake’s corresponding deadline is 3 August. Apollo’s approach followed a sequence of bids from Castlelake. EasyJet had initially rejected those bids, describing them as attempts to acquire the company at a low valuation. On the preceding Sunday, however, EasyJet announced it had reached an agreement in principle with Castlelake for a transaction valued at around £5.2 billion.

Any takeover faces regulatory requirements under European Union rules that mandate majority ownership by EU citizens. Castlelake had outlined a structure involving two EU nationals, Peter Bellew and Mark Breen, who would control an EU-based entity holding majority ownership of the airline. Apollo indicated it would take all necessary steps to satisfy EU ownership conditions.

EasyJet shares rose nearly 15 percent on Friday, reaching approximately 673 pence. The Apollo offer equates to an 81 percent increase relative to the closing price of £3.94 on 28 May, the final trading day before Castlelake’s interest became public. Prior to reaching agreement with Castlelake, EasyJet had characterized the US firm’s initial bids, beginning at 560 pence per share, as opportunistic and had attributed temporary share-price pressure partly to effects from the Iran conflict on the travel sector.

Dan Coatsworth, head of markets at AJ Bell, stated that the process now centers on price. He noted that attention would return to Castlelake to determine whether it would increase its offer, with shareholders positioned to observe developments.

The sequence of events began with Castlelake’s initial approaches, which EasyJet rejected. Subsequent negotiations produced the agreement in principle with Castlelake before Apollo submitted its higher proposal. Both bidders have indicated they will address regulatory requirements, including those related to ownership structure.