Apollo makes surprise £5.7bn takeover bid for easyJet

Apollo jumps ahead

easyJet has reached an agreement in principle with Apollo for a possible £7.15-a-share takeover offer, valuing the airline at about £5.7bn.

The company said on July 10 that its board is minded to recommend Apollo’s terms to shareholders, overtaking Castlelake’s revised £6.90-a-share proposal.

The move sets up a fresh bidding contest for one of Europe’s best-known budget airlines, but the transaction remains conditional and is not a completed takeover.

How the bidding shifted

Castlelake had previously won easyJet support in principle, but Apollo moved above that offer with its higher proposal.

easyJet said it is no longer minded to recommend Castlelake’s bid. According to the reporting reviewed, Apollo’s approach has now become the main proposal under discussion.

The Wall Street Journal reported that Apollo has until August 7 to make a formal offer or walk away.

Regulatory hurdle

Apollo still faces a major structural challenge: European airline rules require majority European ownership and control.

That issue is central because Apollo is a US private equity firm. The company said it intends to take steps to satisfy the rules if the transaction advances, but it has not yet fully set out how it would do so.

What Apollo says it would do

Apollo has said it would keep easyJet’s brand and support the airline’s current strategy and management if the deal goes ahead.

The offer also includes an option for current shareholders to remain invested through Apollo’s vehicle, rather than taking only cash.

That could matter for larger holders and for investors weighing whether the higher headline price is enough to offset the uncertainty around the deal structure.

Shareholders and control

The outcome will matter to shareholders because the board’s recommendation can shape how investors view the competing bids.

It will also be watched closely by the family of founder Stelios Haji-Ioannou, which still holds just over 15% of easyJet.

A final deal would need to clear the formal-offer process and the ownership rules before any change of control could be completed.

What happens next

The immediate test is whether Apollo turns the agreement in principle into a firm offer by the August 7 deadline.

Investors will also watch for any counter-move from Castlelake, which could respond with a higher bid or revised terms.

For now, easyJet has accepted a more attractive proposal in principle, but the airline is still several steps away from any completed takeover.