Apollo Wins easyJet Takeover Battle with £5.7 Billion Offer

Apollo Global Management (NYSE:APO) has agreed to acquire easyJet (LON:EZJ) in a cash deal valuing the British budget airline at £5.7 billion ($7.7 billion), concluding a weeks-long bidding war. The successful offer from the U.S. private equity firm surpasses a rival proposal from Castlelake, marking one of Europe's largest airline buyouts in recent years.

Details of the Offer

Apollo's winning bid is for 715 pence per share in cash, according to a statement on Friday. This represents a premium of approximately 21.6% to easyJet’s previous closing price of 588.20 pence.

The offer topped a 690 pence-per-share proposal from competitor Castlelake, which easyJet's board had previously indicated it was prepared to recommend. Following Apollo's superior offer, easyJet's board stated it is now minded to recommend the new proposal to its shareholders, pending final agreement on the transaction's terms.

Market Reaction

Investors reacted positively to the news, sending easyJet shares surging 13.8% to 704.40 pence in London trading. The move pushed the stock to its highest level since late February 2022 and significantly outperformed the broader FTSE 100 index, which saw a marginal 0.3% gain.

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Context of the Bidding War

The agreement follows a competitive takeover battle for the London-listed carrier. Castlelake had made five separate proposals, with easyJet initially rejecting the bids as opportunistic before tentatively agreeing to the final 690 pence offer earlier this week.

Takeover interest in easyJet has been driven by its strategic assets, which investors believe hold long-term value beyond recent industry-wide challenges. These assets include:

• Valuable landing and takeoff slots at major European airports.
• A modern fleet of Airbus aircraft.
• A rapidly growing package holidays business.

Apollo has also committed to structuring the deal to comply with European Union regulations, which require airlines operating within the bloc to be majority-owned and controlled by EU interests.