EasyJet's shares have recorded a significant surge, climbing by over 13% after its board accepted a takeover bid worth £5.7 billion from US private equity firm Apollo. The proposed deal values each EasyJet share at £7.15, marking the highest price point for the airline's stock since 2021 and a substantial 81% increase from pre-bid levels.
Notably, this latest offer from Apollo surpasses an earlier bid of £5.2 billion (£6.90 per share) made by Castlelake, prompting EasyJet's board to withdraw their previous endorsement for the rival proposal. The £7.15 valuation is also a significant uplift on EasyJet's current market capitalisation, which currently stands at around £4.8 billion.
Apollo's interest in EasyJet is not new, with the firm having invested in various aviation companies including Virgin Atlantic and Air France-KLM. The private equity giant views EasyJet as an attractive business with considerable long-term growth potential, driven by its fleet upgrades, enhanced ancillary services and loyalty programmes, and expanded holidays division.
Despite the board's endorsement, the deal is not yet set in stone. Apollo has until 7 August to present a formal offer under takeover rules, during which time it must navigate complex European regulations that may require adjustments to its ownership structure. However, Apollo's bid does include provisions for existing shareholders to roll their holdings into the new entity.
Market analysts are closely monitoring developments, with some predicting further improved offers from rival bidders. Chris Beauchamp, Chief Market Analyst at IG, noted that a second suitor was anticipated given EasyJet's significant potential despite recent performance. Richard Hunter, Head of Markets at interactive investor, highlighted the positive impact on investor sentiment generated by the prospect of a bidding war.
EasyJet, founded over 30 years ago by Sir Stelios Haji-Ioannou, has been a pioneer in budget air travel, carrying 93.4 million passengers in the year to September 2025 and becoming a major player on the London Stock Exchange following its flotation in November 2000.