Key Highlights
- Apollo Global Management has proposed a £5.7 billion ($7.7 billion) acquisition of EasyJet at 715p per share
- The proposal surpasses Castlelake’s competing 690p per share offer, igniting a competitive takeover battle
- EasyJet shares climbed 14.75% during London trading sessions to reach 674.98p — the strongest performance since early 2022
- Apollo faces an August 7 deadline to formalize its proposal under UK acquisition regulations; Castlelake must act by August 3
- Both potential acquirers face restrictions on complete ownership due to European Union regulations mandating majority European national ownership
EasyJet experienced a dramatic share price increase on Friday following Apollo Global Management’s unsolicited acquisition proposal valued at 715p per share, eclipsing Castlelake’s competing bid and launching what market observers describe as an aggressive takeover contest.
The all-cash proposal at 715p per share places EasyJet’s valuation at £5.7 billion ($7.7 billion), reflecting a 21.6% premium above the carrier’s prior closing value of 588.20p. Trading in London saw shares reach 674.98p — the peak level since February 2022 — though still beneath both competing offers.
Apollo’s proposal emerged mere days following EasyJet’s preliminary acceptance of Castlelake’s fifth and concluding bid set at 690p per share. The airline’s board has now stated it is “no longer minded” to endorse Castlelake’s proposition.
“A bidding war is on,” remarked Neil Wilson, investor strategist at Saxo UK.
EasyJet’s board has indicated readiness to recommend Apollo’s offer to investors, contingent upon finalizing outstanding agreement terms.
Key Assets Drawing Interest
Valuable airport slots, a contemporary Airbus fleet order pipeline, and a rapidly expanding vacation package division are considered the primary attractions for both competing bidders.
Susannah Streeter, chief investment strategist at Wealth Club, identified the holidays business as a probable major draw. Vacation packages deliver superior profit margins and more stable revenue streams compared to airline ticket sales, she explained.
Morgan Stanley indicated Apollo intends to support EasyJet’s current business strategy — fleet expansion, ancillary revenue growth, and holiday division scaling. The investment bank contended that EasyJet possesses stronger long-term expansion prospects under private ownership structures.
Apollo oversees assets exceeding $1 trillion and brings substantial aviation sector experience, having previously invested in Aeromexico, Sun Country Airlines and Atlas Air, while providing capital to Air France-KLM and Virgin Atlantic.
Regulatory Ownership Challenges
Both prospective buyers confront a significant obstacle: European Union and UK regulations mandate that airlines operating within the bloc maintain majority ownership and control by European nationals.
Castlelake’s strategy addressed this requirement by allocating 51% ownership to EU nationals, including aviation industry veterans Peter Bellew and Mark Breen.
Apollo has acknowledged it will undertake necessary measures to secure a European partner but has yet to disclose specific arrangements.
According to UK takeover regulations, Apollo must submit a definitive offer or withdraw by August 7. Castlelake faces an earlier deadline of August 3.
Apollo shares declined 1.1% in 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 significant contributing factor. The carrier warned that second-half results would similarly face challenges.
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