EasyJet has agreed in principle to a £5.7bn takeover proposal from US firm Apollo Global Management, just days after accepting a rival offer from Castlelake. The no-frills airline said Apollo’s bid delivered “a superior outcome” to investors, worth £7.15 per share compared with Castlelake’s £6.90. EasyJet is now “no longer minded” to accept the earlier offer.
Founded by Sir Stelios Haji-Ioannou in 1995, EasyJet launched with flights from Luton to Glasgow and Edinburgh in November that year. It now employs more than 19,000 people, flies around 1,200 routes across 35 European countries, and is one of Europe’s largest airlines. The Haji-Ioannou family still owns about a 15% stake.
“EasyJet agrees in principle to £5.7bn Apollo bid, rejecting rival Castlelake's lower offer.”
Analysts say EasyJet is an attractive target because it is profitable, has a large fleet, and holds valuable take-off and landing slots at major airports such as Gatwick and Paris Charles de Gaulle. Apollo’s interest comes after Castlelake, another US investment firm, made a series of offers. In a short statement, Castlelake said it noted the EasyJet and Apollo statement and was “considering its options in respect of its possible offer”.
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 added that package holidays generate higher margins and more predictable revenues than airline tickets alone.
Conroy Gaynor, senior consumer analyst at Bloomberg Intelligence, noted 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”.
For passengers, it is business as usual for now, with flights, bookings and loyalty schemes unaffected while the deal undergoes regulatory process. Apollo has been set a deadline of 17:00 on 7 August to make a firm bid or walk away; Castlelake’s deadline to make a firm offer is 3 August. A final deal is not yet confirmed.