Apollo Agrees to £5.7bn All-Cash Takeover of Easyjet at 714p Per Share

Apollo has agreed to acquire budget airline Easyjet for £5.7bn in a surprise deal that overrides an earlier bid from alternative asset manager Castlelake.

Easyjet announced on Friday that it was prepared to accept an all-cash offer from the US investment giant, valuing the airline at 714p per share. This surpasses the 690p per share bid received from Castlelake just days earlier.

The offer represents an 80% premium on the airline's closing share price before Castlelake's interest in Easyjet first emerged last month. The carrier stated that Apollo's bid "delivers a superior outcome for Easyjet shareholders," setting the stage for a potential bidding war between the two American investors.

In a statement, Easyjet said the offer from Apollo — one of the world's largest asset managers — represents "an attractive combination of value, strategic alignment and long-term stewardship of the business."

"Accordingly the Easyjet board is no longer minded to recommend the Castlelake proposal," it added.

Easyjet shares rose more than 14% in early trading.

Easyjet to Quit London Stock Exchange

Any deal will see the orange-liveried carrier depart from the London Stock Exchange, making it one of several major FTSE 100 companies to leave the bourse this year.

City darlings Schroders and Beazley have both accepted offers from foreign competitors, while Swedish buyout giant EQT has successfully bid for London-listed Intertek in a deal valuing the testing firm at £11bn.

News of Castlelake's interest in Easyjet first emerged last month. The American alternatives firm, with roughly $38bn (£28.3bn) under management, unveiled a surprise bid for the carrier that initially valued it at £4.7bn.

The offer was rejected outright by the airline's board, which branded the buyout firm's first attempt "opportunistic." However, Castlelake subsequently made a series of improved offers, before shareholders pushed the aviation giant to accept a £5.2bn bid last week.

Should Apollo's counter-offer succeed, Easyjet would become part of the investment giant's growing aviation portfolio. Apollo already part-owns Atlas Air and Modern Aviation, and last year its private credit arm lent $745m to Virgin Atlantic.

Before the flurry of private equity interest emerged, Easyjet had seen its valuation decline sharply as a result of the Iran war. The cost of jet fuel more than doubled in the immediate aftermath of the first wave of strikes, prompting the carrier's shares to fall by more than a third before Castlelake's interest first emerged.