EasyJet Backs Apollo's £5.7bn Takeover Bid, Leaving Castlelake Behind

British low-cost carrier EasyJet has announced that it has agreed in principle to a £5.7 billion takeover proposal from American investment firm Apollo Management. The deal represents a significant development in the European aviation sector and comes amid a competitive bidding process for the airline.

Apollo's Offer Outpaces Castlelake Bid

The Apollo proposal values EasyJet shares at £7.15 each, offering shareholders a higher return than a competing bid from another US investment firm, Castlelake. EasyJet had previously agreed in principle to the Castlelake offer over the weekend, but the newer Apollo bid has now taken precedence.

According to EasyJet, the difference in per-share value between the two offers was a decisive factor. The Castlelake proposal priced shares at £6.90 each, while Apollo's offer of £7.15 per share represents a meaningful premium for investors.

EasyJet Declares Apollo Offer Superior

In a statement, the airline described Apollo's proposal as delivering "a superior outcome" for its shareholders. As a direct result of this assessment, EasyJet indicated that it was "no longer minded" to recommend the Castlelake bid to its investors.

The airline's shift in position underscores the fast-moving nature of the bidding contest. Having initially aligned itself with Castlelake's offer just days earlier, EasyJet's decision to pivot toward Apollo highlights how quickly circumstances can change when competing suitors enter the fray with improved terms.

What Comes Next for EasyJet

While the agreement with Apollo has been reached in principle, the transaction remains subject to further negotiations and standard regulatory scrutiny. The involvement of major US investment firms in acquiring a prominent European airline signals continued investor interest in the aviation sector, which has been navigating a complex recovery landscape.

For EasyJet shareholders, the key consideration will be the finalisation of the deal terms and whether any further competing bids emerge. The per-share price of £7.15 under the Apollo proposal currently stands as the benchmark against which any future offers may be measured.

As this story continues to unfold, the outcome will likely have broader implications for the European low-cost aviation market. What are your thoughts on this developing takeover battle? Share this article with your network and join the conversation about the future of one of Europe's most recognisable budget airlines.

Source: BBC Business