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 surpasses Castlelake’s competing 690p-per-share offer, intensifying competition for the UK budget carrier
- Shares of EasyJet 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 regulations; Castlelake must act by August 3
- Both potential acquirers face regulatory constraints preventing complete ownership due to European Union aviation rules
Shares of EasyJet experienced a significant rally on Friday following Apollo Global Management’s unexpected takeover proposal valued at 715p per share, surpassing a competing offer from Castlelake and initiating what market observers characterize as an aggressive acquisition competition.
The all-cash proposal from Apollo prices EasyJet at £5.7 billion ($7.7 billion), delivering a 21.6% premium compared to the airline’s prior closing price of 588.20p. Trading activity pushed shares to 674.98p in London — the strongest level witnessed since February 2022’s closing weeks — though still below both competing proposals.
Apollo’s proposal emerged shortly after EasyJet had tentatively accepted Castlelake’s fifth consecutive bid at 690p per share. The airline’s board has indicated it is “no longer minded” to endorse Castlelake’s submission.
“A bidding war is on,” remarked Neil Wilson, investor strategist at Saxo UK.
EasyJet’s leadership has expressed willingness to recommend Apollo’s offer to shareholders, contingent upon finalizing outstanding transaction details.
Strategic Assets Drawing Interest
Valuable airport landing slots, a contemporary Airbus fleet portfolio, and a rapidly expanding vacation package division represent the primary attractions for both potential acquirers.
Susannah Streeter, chief investment strategist at Wealth Club, identified the holiday operations as a probable focal point of interest. Packaged vacation offerings deliver superior profit margins and more stable revenue streams compared to standalone flight bookings, she observed.
Morgan Stanley indicated Apollo intends to support EasyJet’s current business strategy — fleet expansion, ancillary revenue enhancement, and vacation unit growth. The investment bank suggested 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 acquired stakes in Aeromexico, Sun Country Airlines and Atlas Air, while extending financing to Air France-KLM and Virgin Atlantic.
Regulatory Ownership Constraints
Both bidding parties confront a significant challenge: European Union and United Kingdom regulations mandate that airlines operating within EU territory maintain majority ownership and management control by European citizens.
Castlelake’s strategy addressed this requirement by allocating 51% ownership to EU nationals, including aviation industry experts Peter Bellew and Mark Breen.
Apollo has acknowledged it will implement appropriate measures to secure a European partnership but has yet to disclose specific arrangements.
According to UK takeover regulations, Apollo must present a definitive offer or withdraw by August 7. Castlelake’s corresponding deadline arrives four days prior on August 3.
Apollo’s shares declined 1.1% during U.S. premarket trading following the announcement.
This past May, EasyJet disclosed that first-half losses expanded 27% to £377 million, with escalating fuel expenses linked to US-Iran tensions identified as a significant contributing factor. The carrier warned that second-half results would similarly be impacted.
