Apollo Global Management has emerged as the leading contender to acquire UK budget flyer easyJet after tabling a higher takeover proposal that has prompted the airline’s board to withdraw its support for rival bidder Castlelake.
The US private equity giant has proposed a cash offer of £7.15 per share (around AU$14.78), valuing the low-cost carrier at £5.2 billion (approximately A$10.75 billion). The bid tops Castlelake’s latest proposal of £6.90 per share (around AU$14.26).
In a statement to the London Stock Exchange, easyJet said its board had “unanimously concluded that the financial terms of the proposed cash offer are at a level that it would be minded to recommend to easyJet shareholders”.
The airline added that Apollo’s proposal “delivers a superior outcome for easyJet shareholders by providing a higher cash value than Castlelake’s latest proposal of £6.90 per easyJet share”.
Last week, Easyjet said it agreed in principle to the $10 billion takeover bid from US investment firm Castlelake.
EasyJet also said it believes the new proposed transaction offers “an attractive combination of value, strategic alignment and long-term stewardship of the business”, meaning the board is “no longer minded to recommend the Castlelake proposal”.
Apollo has until 5pm on August 7 to either announce a firm offer or walk away under UK takeover rules, while Castlelake faces an earlier August 3 deadline.
The investment firm described itself as a long-term aviation investor that has followed easyJet for many years and considers it “one of the most attractive businesses in the global aviation sector”.
Apollo said it supports easyJet’s existing strategy of strengthening its low-cost model through larger aircraft, expanded ancillary revenue, a stronger loyalty proposition and continued growth of easyJet Holidays.
The firm believes taking the airline private would provide access to additional capital and enable longer-term strategic planning, accelerating management’s commercial and operational ambitions.
Apollo also pledged to retain the easyJet brand, continue the airline’s licensing agreement with easyGroup, and work closely with employees to support future growth.
The aviation-focused investor has built an extensive portfolio across the sector, including interests in aircraft lessor Perseus Aviation, financing for Air France-KLM, investments in Aeromexico and SAS, and its 2024 agreement to acquire The Travel Corporation, parent company of brands including Trafalgar, Uniworld, Contiki and Insight Vacations.
