EasyJet has become the subject of a potential bidding war after Apollo Global Management offered £5.7 billion ($7.5 billion), or 715 pence per share, for the airline. This offer significantly exceeds the £5.2 billion ($6.9 billion) bid previously agreed to in principle by Castlelake LP, which valued EasyJet at 690 pence per share. EasyJet stated that while it was no longer inclined to recommend Castlelake's proposal, it would be "minded to recommend" Apollo's terms to its shareholders. Apollo's bid represents a 3.6% premium over Castlelake's latest offer and a substantial premium over EasyJet's stock price before the takeover speculation began. Following the news, EasyJet's shares surged by 15% in London to approximately 676 pence, indicating investors anticipated a higher bid.
Apollo's proposal outlines that EasyJet shareholders could roll their existing stock into a "stub equity alternative" within the Apollo funds. The acquisition would be financed through a combination of equity and debt facilities, with Barclays arranging the debt. Both Apollo and Castlelake face the challenge of meeting European regulatory requirements for airline ownership, which mandate majority ownership and control by regional nationals, as both are US-based entities. This means Apollo would need a European partner to proceed with the deal.
Castlelake, despite being outbid, still holds a potential advantage as it was granted access to EasyJet's books after its earlier improved offer. Castlelake also provided more detailed bid structuring, including former EasyJet executive Peter Bellew as part of a management duo intended to hold the majority of the bidding vehicle, with Brookfield Asset Management
