Image: Thomas Nugent · CC BY-SA 2.0 · via Wikimedia Commons
Apollo Agrees £5.7bn Bid to Acquire EasyJet After Castlelake Withdraws
Apollo Management has reached a recommended £5.7 billion deal to buy EasyJet, following Castlelake's decision not to make a formal offer.
The gist
Apollo secures agreement to acquire EasyJet for £5.7 billion after Castlelake drops out of bidding contest.
Continuing coverage
All Acquisition →Apollo Management has agreed to a recommended offer valued at £5.7 billion ($7.7 billion) to acquire UK budget airline EasyJet. This agreement follows Castlelake's announcement that it will not submit a formal bid by the 7 August deadline given to both potential buyers. The confirmed bid price stands at £7.15 per share, a premium the EasyJet board has endorsed over the airline's standalone prospects.
EasyJet’s board had earlier indicated support for Apollo’s proposed acquisition, favoring the £7.15-per-share offer compared to the previous potential bid of £6.90 per share from Castlelake. Apollo’s offer represents an 81% premium relative to EasyJet’s share price as of 28 May, and a 22% premium concerning the company’s highest four-year closing price prior to that date.
The acquisition bid is being made through Eagle Bidco, an entity indirectly owned by Apollo Funds and managed by Apollo Capital Management and its affiliates. EasyJet's chairman, Stephen Hester, stated that the board carefully weighed Apollo’s offer alongside EasyJet’s future prospects and concluded the deal suitably reflects the value of the company and provides immediate, assured returns to shareholders.
Antoine Munfakh, Apollo’s partner and deputy global head of Private Equity, expressed confidence in the partnership, highlighting Apollo’s experience in airline sector investments. He emphasized Apollo’s commitment to deploying capital and operational expertise to drive sustainable, long-term growth for EasyJet. This strategic backing aims to harness EasyJet’s potential fully.
A notable element of support for the transaction comes from Stelios Haji-Ioannou and his family, who together hold over 15% of EasyJet’s shares. They provided irrevocable undertakings in favor of Apollo’s offer. Haji-Ioannou remarked on Apollo’s strategic vision for EasyJet, reflecting on the strength of the Easy brand and EasyGroup’s business model, and confirmed his and his family’s intent to remain significant long-term shareholders.
The timeline for the acquisition anticipates completion by the end of the first quarter of 2027. This prospective transition marks a significant shift in ownership for one of Europe’s leading low-cost carriers, signaling potential strategic realignments under Apollo’s stewardship.
Prior to Apollo’s agreement, Castlelake was considered a serious contender with an initial proposed offer. However, Castlelake officially withdrew from the bidding, signaling a clear path for Apollo to proceed with its acquisition proposal. Castlelake expressed appreciation for its engagements with EasyJet’s board but elected against submitting a formal bid.
The move to acquire EasyJet highlights the ongoing interest of private equity firms in the aviation industry, particularly as carriers seek capital and expertise to navigate evolving market conditions and competition. Apollo’s stated hands-on operational approach may position EasyJet for enhanced growth and competitive advantage within the budget airline sector.
Frequently asked questions
- What is the value of Apollo Management's offer to acquire EasyJet?
- Apollo Management's recommended offer to acquire EasyJet is valued at £5.7 billion, equivalent to £7.15 per share.
- Why did Apollo become the preferred bidder for EasyJet?
- Apollo became the preferred bidder after Castlelake withdrew from offering a formal bid and EasyJet's board signaled its support for Apollo's higher bid of £7.15 per share over Castlelake's earlier proposed offer.
- Who among EasyJet's shareholders supports Apollo's bid?
- Stelios Haji-Ioannou and his family, holding over 15% of EasyJet’s shares, have given irrevocable undertakings supporting Apollo's acquisition offer and intend to remain long-term major shareholders.
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