Apollo Tables Superior £5.7 Billion Bid for easyJet, Triggering Takeover Battle

LONDON: British low-cost airline easyJet has backed a new £5.7 billion ($7.7 billion) takeover proposal from U.S.-based investment firm Apollo Global Management, after the company submitted a higher offer than rival bidder Castlelake, setting the stage for a potential bidding war.

Apollo’s all-cash proposal values easyJet at 715 pence per share, exceeding Castlelake’s earlier offer of 690 pence per share, which the airline had provisionally agreed to only days earlier. The easyJet board said it is now minded to recommend Apollo’s superior offer to shareholders, subject to a formal bid being submitted.

Under the proposed transaction, Apollo has pledged to preserve easyJet’s existing brand, management team and workforce while supporting the airline’s long-term growth strategy, including fleet modernization and expansion of its holidays business. The proposal also allows existing shareholders the opportunity to retain an equity interest in the business following the acquisition.

The competing bids have sent easyJet shares sharply higher, with the stock rising around 15% as investors anticipated the possibility of an intensified contest for control of the airline. Market analysts said shareholders could benefit further if Castlelake decides to return with an improved offer before the takeover deadline in early August.

The proposed acquisition remains subject to regulatory approvals, including compliance with European Union ownership rules governing European airlines. Both bidders are expected to address those requirements as they move toward submitting formal offers. Apollo has until August 7 to make its binding bid, while Castlelake retains the option to revise its proposal.