easyJet Backs Apollo’s $7.7 Billion Takeover Bid, Drops Support for Castlelake Offer

Post by : Saif

British low-cost airline easyJet has endorsed a £5.7 billion ($7.7 billion) takeover proposal from Apollo Global Management, withdrawing its earlier support for a lower offer from private investment firm Castlelake.

Apollo's proposal values easyJet at £7.15 per share, around 3.6% higher than Castlelake's £6.90-per-share bid, creating the possibility of a takeover battle for one of Europe's largest budget airlines.

easyJet Board Switches Support to Apollo

The airline's board said Apollo's proposal delivers greater value for shareholders and better supports easyJet's long-term business strategy.

Only days earlier, easyJet had agreed in principle to support Castlelake's offer. However, the higher valuation from Apollo prompted the airline to withdraw that backing.

Under UK takeover rules, Apollo must submit a firm offer by August 7, while Castlelake has until August 3 to decide whether to improve its proposal or walk away.

Shares Rise as Investors Welcome Bidding Battle

Following the announcement, easyJet shares rose by as much as 15% in early trading, reaching their highest level since February 2022.

Market analysts said the emergence of competing bidders reflects investor confidence that easyJet's market value has been underestimated.

Some investors also believe the bidding contest could lead to an even higher final offer.

Apollo Plans to Keep easyJet Brand and Growth Strategy

Apollo said it intends to retain the easyJet brand through its existing licensing agreement with easyGroup, the company founded by airline founder Stelios Haji-Ioannou.

The investment firm also pledged to keep the airline's leadership team and continue its strategy of expanding flight capacity while growing its package holiday business.

In addition, Apollo said eligible shareholders would have the option of rolling their investments into the private company that would own easyJet after the acquisition.

Regulatory Approval Remains Key Challenge

Industry analysts noted that any takeover of a European airline by a non-European investor must satisfy European Union ownership and control rules, which require EU airlines to remain majority owned and effectively controlled by EU interests.

Apollo said it is committed to obtaining all required competition, merger and regulatory approvals before completing the acquisition.

Castlelake has not publicly detailed its long-term plans for easyJet beyond supporting the airline's fleet modernisation programme, including replacing older aircraft with more fuel-efficient Airbus aircraft.

The final outcome of the takeover process is expected to depend on regulatory approval and whether either bidder increases its offer in the coming weeks.

#trending #latest #easyJet #Apollo #Castlelake #Takeover #BusinessNews #AirlineNews #Aviation #UKNews #London #GlobalBusiness #StockMarket #Investment #EuropeNews #TravelIndustry #AviationNews #BreakingNews