Apollo Management's £5.7 billion takeover bid has emerged as the preferred choice for EasyJet's board, outshining Castlelake's earlier offer valued at approximately £5.2 billion. The Luton-based carrier values its shares at a premium of 18% under Apollo's bid, priced at £7.15 each compared to Castlelake's offer of £6.90 per share. This significant uplift in valuation reflects the intense competition for EasyJet, with both bidders eager to capitalise on its extensive network and brand recognition across 35 European nations.
EasyJet employs over 19,000 staff and operates some 1,200 routes; despite initial agreement in principle with Castlelake's £5.2 billion offer, the board has swiftly shifted preference following Apollo's intervention. A definitive deal remains elusive, however, as both bidders face a critical deadline: Apollo must present a firm offer by 5 pm on 8th August or withdraw its interest.
A significant regulatory hurdle persists for any potential acquirer: European Union rules dictate that EasyJet maintain majority ownership by EU citizens. Castlelake had addressed this issue by proposing an EU-based company, partnered with two EU nationals, to hold control of the airline; it is anticipated that Apollo would need to devise a similar structure.
This bidding war has unfolded following Castlelake's initial approaches to EasyJet, which were met with rejection due to concerns over undervaluation. The increased valuation from Apollo underscores the competitive landscape for established carriers in mergers and acquisitions, particularly those with strong market positions like EasyJet.