Apollo Global Management to acquire Easyjet for £5.7bn in all-cash deal

Easyjet has accepted a £5.7bn takeover bid from Apollo, a deal that supersedes an earlier offer from alternative asset manager Castlelake.

Deal Details

The US investment giant's all-cash offer values the budget airline at 714p per share, surpassing 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 first emerged last month.

Easyjet said the Apollo bid "delivers a superior outcome for Easyjet shareholders," potentially setting up a bidding war between the two American investors.

In a statement, the carrier described the offer from Apollo – one of the world's largest asset managers – as "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.

Departure from London Stock Exchange

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

Background

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 initially valuing the carrier at £4.7bn. The airline's board rejected that offer outright, branding it "opportunistic."

Castlelake then made a series of improved offers, before shareholders pushed the aviation juggernaut to accept a £5.2bn bid last week.

Apollo's Aviation Portfolio

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

Valuation Context

Before the flurry of private equity interest, Easyjet had seen its valuation decline sharply due to 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.