EasyJet has agreed in principle to a £5.7bn takeover by US private equity firm Apollo Global Management, just days after accepting a lower offer from rival suitor Castlelake. The budget airline said Apollo’s bid of £7.15 per share delivered “a superior outcome” to investors compared with Castlelake’s £6.90 proposal, which EasyJet said it was now “no longer minded” to accept.
The carrier, founded by Sir Stelios Haji-Ioannou in 1995 and still 15% owned by the Haji-Ioannou family, employs more than 19,000 people and flies around 1,200 routes across 35 European countries. Its first flights took off in November 1995 from Luton to Glasgow and Edinburgh. Apollo’s offer values the airline at £5.7bn, trumping Castlelake’s earlier bid.
“EasyJet agrees to £5.7bn takeover by Apollo, beating Castlelake's lower bid.”
In a short statement, Castlelake said it noted the announcement and was “considering its options in respect of its possible offer”. Castlelake’s deadline to make a firm offer is 3 August, while Apollo has until 17:00 on 7 August to either make a firm bid or walk away. The latest statement does not confirm a deal; Apollo must still make a binding offer.
Analysts said EasyJet’s appeal lies in its profitability, large fleet, and valuable take-off and landing slots at 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.”
For passengers, Streeter said it was “very much business as usual for now, with flights, bookings and loyalty schemes unaffected while any deal works its way through the regulatory process”. However, Conroy Gaynor, senior consumer analyst at Bloomberg Intelligence, warned that 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”.
The takeover battle leaves the airline’s future ownership uncertain, with two suitors circling and deadlines looming. Whether Apollo can seal the deal – or Castlelake returns with a higher offer – remains to be seen.