EasyJet Takeover Bid: Apollo Enters with £5.7bn Offer

EasyJet has become the focal point of a surprise easyjet takeover bid that has escalated into a bidding war between two US private equity firms. Just days after accepting an offer from Castlelake, the airline's board has switched allegiance to a higher proposal from Apollo Global Management, valuing the company at £5.7 billion. This development raises questions about the future of one of Europe's largest low-cost carriers.

The Bidding War Escalates

EasyJet said it had agreed in principle to a £5.7bn takeover proposal from Apollo, which valued the company at £7.15 per share. This topped the previous offer of £6.90 per share from Castlelake, which the board had also agreed to in principle just days earlier. The board unanimously concluded that Apollo's offer delivered "a superior outcome" to investors and stated it was "no longer minded" to recommend the Castlelake proposal. Castlelake declined to comment on the latest move.

Apollo's Offer Details

Apollo's all-cash proposal values EasyJet at £7.15 per share, a premium over Castlelake's £6.90. Importantly, Apollo signalled it would back EasyJet's current strategy and management and was not looking to break up the company. The offer allows current shareholders—including founder Sir Stelios Haji-Ioannou and his family, who own about a 15% stake—to remain invested under Apollo's ownership rather than being forced to sell when EasyJet delists. Apollo also plans to keep the EasyJet brand by continuing the existing brand licence agreement with Stelios Haji-Ioannou's EasyGroup, under which he collects a 0.25% royalty on revenue. This move could prove attractive to the founder, who has historically been protective of the brand.

For readers seeking a detailed timeline of the EasyJet takeover bid, see our earlier coverage.

Implications for EasyJet and the Industry

EasyJet is one of Europe's largest airlines, employing more than 19,000 people and flying around 1,200 routes across 35 European countries. Analysts view EasyJet as an attractive target because it is profitable, has a large fleet of aircraft, and holds valuable take-off and landing slots at major airports such as Gatwick and Paris Charles de Gaulle. Some of these slots can be worth tens of millions of pounds when traded. Additionally, Susannah Streeter of Wealth Club noted that Apollo is focusing on EasyJet's potential, including its fast-growing holidays business, which has built a resilient European network and a strong balance sheet. Despite being buffeted by higher fuel costs and geopolitical turbulence, EasyJet's holidays division is seen as a key growth driver.

The bidding war underscores private equity's appetite for European aviation assets, particularly those with strong operational infrastructure and brand recognition. EasyJet's low-cost model, combined with its shift toward holiday packages, makes it a unique proposition in a sector still recovering from pandemic-era disruptions.

What Next for Shareholders?

Apollo must announce a firm offer for EasyJet by August 7 or walk away. Castlelake has until August 3 to respond or improve its bid. Shares in EasyJet rose as much as 15% to £6.75 in early trade, their highest since February 2022, though still below Apollo's bid price. The gap suggests some market skepticism about the deal clearing regulatory hurdles. Apollo said it was committed to taking "all necessary steps" to satisfy merger control and EU subsidies-related clearances. The board's recommendation could shift again if Castlelake returns with a higher offer or if regulatory concerns emerge. For now, the ball is in the court of both suitors, with the founder's stake and brand loyalty playing a pivotal role.

This takeover battle is far from over. The coming weeks will determine whether Apollo secures EasyJet or whether Castlelake—or another bidder—emerges with a winning hand. For shareholders, the premium offers represent a short-term windfall, but the long-term implications for Europe's aviation landscape remain uncertain.