Only days after accepting a takeover from Castlelake, EasyJet has torn up that agreement and thrown its weight behind a surprise £5.7bn bid from Apollo Global Management. The no-frills airline said Apollo's offer delivered "a superior outcome" to investors, worth £7.15 per share against the £6.90 per share proposal from Castlelake that it was now "no longer minded" to accept.
Castlelake said it noted the statement and was "considering its options in respect of its possible offer". Apollo has been set a deadline of 17:00 on 7 August to either make a firm bid or walk away, while Castlelake's deadline to make a firm offer is 3 August.
“EasyJet has agreed a £5.7bn takeover by US firm Apollo, trumping a rival bid from Castlelake agreed just days ago.”
EasyJet was founded by Sir Stelios Haji-Ioannou in 1995 to offer cheap air fares to Europe and, together with carriers such as Ryanair, has transformed UK air travel. Sir Stelios and the Haji-Ioannou family still own about a 15% stake in the airline. It employs more than 19,000 people and flies around 1,200 routes across 35 European countries.
Analysts said EasyJet is an attractive target because it is profitable, has a large fleet of aircraft, and holds take-off and landing slots at major airports such as Gatwick and Paris Charles de Gaulle. Susannah Streeter, chief investment strategist at Wealth Club, said Apollo was focusing on EasyJet's potential. "While the carrier has been buffeted recently by higher fuel costs and geopolitical turbulence, it has built a resilient European network, a strong balance sheet and, crucially, a fast-growing holidays business. That's likely to be one of Apollo's biggest attractions," she said. "Package holidays generate higher margins and more predictable revenues than airline tickets alone."
Conroy Gaynor, senior consumer analyst at Bloomberg Intelligence, said while Apollo has "more explicitly" backed EasyJet's growth model, "the need to improve the airline margin suggests any success in lowering costs won't necessarily translate to lower fares".
For passengers, it is "business as usual for now", with flights, bookings and loyalty schemes unaffected while any deal works through the regulatory process, EasyJet said. The latest statement does not mean a deal has been confirmed — Apollo must firm up its offer by 7 August. Until then, the fate of one of Europe's largest airlines — and the price travellers will pay — remains uncertain.