EasyJet has agreed to back a new takeover proposal from US investment firm Apollo Global Management, setting the stage for a bidding war over one of Europe’s largest budget airlines. On Friday the airline’s board withdrew its support for a previous £5.5 billion offer from rival US group Castlelake and instead endorsed Apollo’s £5.7 billion cash proposal of £7.15 per share, a move that immediately pushed easyJet shares up as much as 16% to their highest level since February 2022. The Apollo bid, which values the company at roughly $7.7 billion, not only tops Castlelake’s offer by 3.6% but also comes with additional terms that appear designed to win over key stakeholders, including founder and largest shareholder Sir Stelios Haji-Ioannou. Apollo has said it intends to keep the easyJet brand and the existing licensing agreement with easyGroup in place, and has even floated the possibility of Haji-Ioannou taking part in the ownership structure if the deal goes through. 84731375
The offer arrives at a turbulent time for the airline industry, with soaring jet fuel prices linked to Middle East tensions and ongoing pressure on margins weighing on carriers across Europe. EasyJet’s stock had lagged behind rivals like Ryanair and remained well below pre-pandemic levels, which analysts say made it an attractive target for private equity firms looking to capitalize on what they see as an undervaluation. Under UK takeover rules, Apollo now has until August 7 to announce a firm intention to make an offer or walk away, while Castlelake has said it is considering its options after having its deal effectively superseded just days after an agreement in principle was reached.
Beyond the price, regulatory hurdles remain central to any potential deal. Because easyJet operates across Europe using EU aviation licenses, it must remain majority EU-owned and controlled, a requirement that complicates any acquisition by a non-EU buyer. Nevertheless, the board said it would be “minded to recommend” Apollo’s proposal to shareholders should a formal offer be made. With valuable airport slots, a growing package holiday business, and a brand that has defined low-cost travel for three decades, easyJet is now at the center of a contest that could reshape ownership of a key player in European short-haul aviation.
