EasyJet backs £5.7bn Apollo takeover proposal over earlier bid
EasyJet has backed a £5.7 billion takeover proposal from US investment firm Apollo, replacing an earlier £5.5 billion offer from Castlelake.
By Sky News
EasyJet has backed a higher takeover proposal from US asset management firm Apollo, raising the prospect of a bidding battle for the budget airline.
Apollo’s proposal values easyJet at £5.7 billion, above the £5.5 billion deal previously agreed with US investor Castlelake.
The airline said the new proposal offered a better outcome for shareholders and confirmed it was no longer recommending the Castlelake offer.
Apollo has proposed paying £7.15 per share.
EasyJet shares rose by almost 14% on Friday morning following news of the revised offer, although they remained below the proposed takeover price at just under £6.70.
The deal is not yet complete.
Apollo’s proposal remains an offer in principle, meaning the investment firm must either announce a firm intention to make an offer or confirm that it will not proceed.
It has until 7 August to make that decision.
Any completed takeover would also require shareholder and regulatory approval.
If the deal goes ahead, easyJet would cease to be listed on the London Stock Exchange.
Castlelake could still return with a higher proposal.
The firm had already submitted five offers before easyJet accepted its £5.5 billion valuation earlier this week.
That leaves open the possibility of further competition for control of the airline.
EasyJet has become a takeover target after facing a difficult recovery from the pandemic, higher fuel costs and a sharp fall in its share price over recent years.
The airline recently reported a £552 million loss for the first half of its financial year.
Despite those challenges, easyJet remains one of Europe’s best-known low-cost carriers and operates an extensive network of short-haul routes.
Its airport slots, brand and established customer base are likely to be important attractions for potential buyers.
The latest development means shareholders must now wait to see whether Apollo converts its proposal into a formal offer and whether Castlelake responds with another bid.
Until then, easyJet remains publicly listed and no takeover has been completed.