Apollo’s £5.7bn easyJet takeover bid moved ahead on Friday, after the airline said its board was minded to recommend the all-cash offer over Castlelake’s earlier proposal. The change puts easyJet shareholders in the middle of a bidding war and gives them a clearer path to a premium offer if Apollo follows through.
The Apollo proposal values easyJet at £7.15 a share, above the £6.90 offered under Castlelake’s deal. That gap is small in headline terms but meaningful in a takeover process where board support can determine which bidder gets the first serious chance to win over shareholders.
Friday’s board shift
On Friday, easyJet said the board had “carefully considered the proposed cash offer together with its financial advisers” and had “unanimously concluded that the financial terms of the proposed cash offer are at a level that it would be minded to recommend to easyJet shareholders”. Apollo’s offer is worth £5.7bn, and the company said it is no longer minded to recommend the Castlelake proposal.
That reversal came after easyJet had agreed in principle earlier this week to accept Castlelake’s £5.5bn proposal. The switch leaves Apollo with the board’s preferred position for now, while Castlelake’s earlier approach has been pushed aside by the higher offer.
Stelios Haji-Ioannou stake
Stelios Haji-Ioannou still owns more than 15% of easyJet along with his family, and he would be in line for an £855m payday if the £5.7bn bid succeeded and he chose to sell. Apollo also said it intends to keep the existing brand licence agreement with him in place, which helps explain why the founder remains one of the most important shareholders to watch in the process.
Apollo said it is not looking to break up easyJet and said it believes in the airline’s “existing strategy of evolving and strengthening the low-cost carrier model, most notably through upgrading the fleet, enhancing the ancillary and loyalty offering, and scaling holidays into a structurally differentiated earnings stream”. For current shareholders, the key practical point is that Apollo’s structure allows them to remain invested under Apollo’s ownership rather than being forced to divest when easyJet delists.
EU rules and 7 August
Apollo said it will “take all necessary steps” to meet EU rules on foreign ownership, under which European airlines must be majority owned by investors within the region. That requirement is the main gatekeeper for any final deal, because a bid can only move forward if the ownership structure fits the rulebook.
Apollo has until 7 August to make a firm offer for easyJet. easyJet’s shares jumped 14% on Friday morning as the bidding war sharpened, but the next step depends on whether Apollo turns its potential offer into a binding one by that deadline.
