The UK's aviation sector is set for a thrilling showdown after private equity giant Apollo tabled an eye-catching £5.7bn bid for EasyJet, outbidding Castlelake and sparking a potential takeover battle that could see the airline's shares soar to 715p each. This significant offer represents a 24% premium on Castlelake's revised £4.6bn proposal, underscoring the escalating stakes in the fight for control of Europe's fifth-largest airline.
EasyJet's board has indicated it is prepared to accept Apollo's offer – contingent on formal confirmation of the terms – describing it as a 'superior outcome' for shareholders. The airline's robust balance sheet and ambitious profit targets have made it an attractive target for buyout firms, despite its recent share price decline by over a third.
The conflict in Iran, which more than doubled kerosene prices, had already put EasyJet under pressure, exacerbating the broader decline in airline stock values. Prior to Castlelake's initial £3bn approach last month, EasyJet's shares had fallen significantly, rendering it an attractive proposition for investors despite its sound financial footing.
Castlelake's revised £5.2bn offer, though higher than initially anticipated, now faces stiff competition from Apollo's more competitive bid. The Minneapolis-based asset manager will need to navigate EU ownership regulations, which dictate that European airlines must maintain majority European ownership – a hurdle Apollo is willing to overcome with 'all necessary steps'.
The £5.7bn offer represents a substantial valuation for EasyJet, marking a significant moment in the airline's 25-year history under founder Stelios Haji-Ioannou. The potential acquisition has far-reaching implications for the UK aviation sector and will be closely watched by investors as the takeover battle unfolds.