Key Highlights
- Apollo Global Management has submitted a takeover proposal for EasyJet valued at £5.7 billion ($7.7 billion), offering 715p per share
- This proposal exceeds Castlelake’s competing offer of 690p per share, initiating a competitive bidding situation for the low-cost carrier
- Shares of EasyJet climbed 14.75% during London trading sessions to reach 674.98p — the highest price point since February 2022
- Apollo faces an August 7 deadline to formalize its proposal under UK takeover regulations; Castlelake must act by August 3
- Both potential acquirers face regulatory constraints preventing complete ownership due to European Union aviation rules
Shares in EasyJet experienced a significant rally on Friday following Apollo Global Management’s unexpected takeover proposal of 715p per share, which exceeded a competing offer from Castlelake and initiated what market observers describe as an intense bidding competition.
The all-cash proposal at 715p values the British budget carrier at £5.7 billion ($7.7 billion), marking a 21.6% premium over EasyJet’s prior closing price of 588.20p. Trading activity pushed shares to 674.98p in London — the strongest level witnessed since the closing days of February 2022 — though still beneath both competing offers.
Apollo’s proposal emerged just days following EasyJet’s tentative agreement with Castlelake’s fifth and ultimate offer of 690p per share. The airline’s board has now indicated it is “no longer minded” to endorse Castlelake’s proposal.
“A bidding war is on,” said Neil Wilson, investor strategist at Saxo UK.
EasyJet’s board members have expressed readiness to recommend Apollo’s proposal to shareholders, contingent upon finalizing outstanding deal terms.
Key Assets Drawing Interest
Valuable airport landing slots, a contemporary Airbus fleet order book, and a rapidly expanding package holiday division are perceived as primary attractions for both potential acquirers.
Susannah Streeter, chief investment strategist at Wealth Club, suggested the vacation business represents a particularly compelling draw. Package holiday operations deliver superior profit margins and more stable revenue streams compared to traditional airline ticketing, she explained.
Morgan Stanley indicated Apollo intends to support EasyJet’s current strategic direction — expanding aircraft capacity, enhancing ancillary revenue streams, and growing the holidays segment. The investment bank maintained that EasyJet possesses stronger long-term expansion prospects as a privately held entity.
Apollo oversees assets exceeding $1 trillion and brings substantial aviation sector experience, having previously invested in carriers including Aeromexico, Sun Country Airlines and Atlas Air, while extending financing arrangements to Air France-KLM and Virgin Atlantic.
Regulatory Complications
Both prospective buyers confront a significant challenge: European Union and UK aviation regulations mandate that airlines serving EU destinations maintain majority ownership and operational control by European nationals.
Castlelake’s proposal navigated this requirement by allocating 51% ownership to EU nationals, including experienced aviation executives Peter Bellew and Mark Breen.
Apollo has acknowledged it will implement necessary measures to identify a European partner but has yet to disclose specific arrangements.
According to UK takeover regulations, Apollo must present a definitive offer by August 7 or withdraw from consideration. Castlelake’s corresponding deadline arrives four days earlier on August 3.
Apollo’s shares declined 1.1% during U.S. premarket trading following the announcement.
In May, EasyJet disclosed that first-half losses expanded 27% to £377 million, with escalating fuel expenses linked to the US-Iran conflict identified as a primary contributing factor. The carrier warned that second-half results would similarly face headwinds.
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