EasyJet weighs Apollo takeover proposal as rival bids intensify
EasyJet is considering a $7.7 billion takeover proposal from Apollo Global Management as competition for the budget airline escalates. The approach follows Castlelake's earlier $7.3 billion offer and points to rising private equity interest in the European aviation sector.
Highlights
- Apollo submitted a takeover proposal valuing EasyJet at 7.15 pounds per share, or about 5.7 billion pounds ($7.66 billion), including a Stub Equity Alternative for shareholders.
- Apollo's offer represents an 81% premium to EasyJet's 3.94 pound closing price on May 28, prior to the offer period triggered by Castlelake's bid.
- EasyJet shares surged after accepting Castlelake's $7.3 billion bid, intensifying competition among private equity firms for the airline amid industry headwinds.
Apollo bid terms and shareholder options
As reported by CNBC, EasyJet said Friday it is reviewing a cash offer from Apollo that values the airline at 7.15 pounds per share, or about 5.7 billion pounds, equivalent to roughly $7.66 billion.Alongside the cash proposal, Apollo is also offering a Stub Equity Alternative that would allow shareholders to roll their existing EasyJet holdings into the acquisition vehicle through which Apollo funds would own the company. EasyJet said the structure, which would let shareholders keep voting rights, remains subject to further discussion.
Market reaction and sector implications
Apollo's proposed price represents an 81% premium to EasyJet's closing share price of 3.94 pounds on May 28, the final business day before the offer period began on Castlelake's bid for the carrier.EasyJet shares soared on Monday after the airline accepted Castlelake's $7.3 billion takeover offer, setting up a bidding war for one of Europe's best-known low-cost airlines. The rival approaches underscore how private equity firms are targeting aviation assets with established market positions despite continued pressure on the sector's operating environment.
EasyJet’s privatization plans were previously covered in our publication, noting that the airline was exploring a move away from the public markets to gain more flexibility amid rising costs and tougher competition in Europe. We outlined management’s view that private ownership could support longer-term restructuring and targeted investment in technology and customer service as the sector continues to recover.
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