EasyJet, the low-cost airline, has agreed in principle to a £5.7 billion takeover proposal from US firm Apollo Global Management. This development comes just days after EasyJet had initially accepted an offer from rival suitor Castlelake. EasyJet stated that Apollo's offer of £7.15 per share provides a "superior outcome" for investors compared to Castlelake's £6.90 per share proposal, leading EasyJet to declare it is "no longer minded" to accept Castlelake's bid.
Castlelake, which had previously offered approximately £5.2 billion for EasyJet, stated it is "considering its options." Apollo's offer represents an 81% increase from EasyJet's share price of £3.94 on May 28, the last trading day before takeover interest became public. Analysts, such as Dan Coatsworth from AJ Bell, note that the bidding war is now primarily about price, suggesting shareholders are benefiting from the competition.
Key hurdles for any takeover include European Union regulations requiring EasyJet to be majority-owned by EU citizens. Castlelake had planned to partner with EU nationals Peter Bellew and Mark Breen to address this. Apollo has committed to taking "all necessary steps" to meet these EU conditions. EasyJet is considered an attractive target due to its profitability, large fleet, and valuable take-off and landing slots at major airports like Gatwick and Paris Charles de Gaulle. Additionally, its fast-growing holidays business, which offers higher margins and more predictable revenues, is a significant attraction for potential buyers.
