In a surprise announcement, British low-cost carrier (LCC) easyJet say they have accepted an acquisition offer from Apollo Management, days after agreeing a deal with rival investors Castlelake.
The airline’s board reported that they would accept Castlelake’s takeover offer, worth £5.2 billion, on 5 July. The US investment firm had made multiple proposals to buy easyJet over the past month. But 10 July the carrier surprised everyone by saying the proposal from Apollo delivered a ‘superior outcome’.
Apollo have offered £7.15 per share, higher than the £6.90 set out by Castlelake. During earlier discussions, easyJet had accused Castlelake of taking advantage of aviation’s depreciated share prices in the wake of the ongoing Middle Eastern conflict. Worth £5.7 billion, Apollo’s bid is £1 billion higher than an earlier Castlelake attempt that easyJet rejected as ‘cheap’.
Castlelake have until 3 August to make a firm offer for easyJet if they wish to outbid Apollo. If the Apollo deal goes ahead, it is uncertain how the US investment firm will manage the airline as under EU law easyJet has to be majority-owned by EU citizens. Castlelake planned to create a new subsidiary, run by two EU citizens and aviation businessmen, Peter Bellew and Mark Breen, to meet this regulation.
easyJet is one of Europe’s biggest carriers, operating 1,200 routes across 25 countries. The airline, based out of Luton, also employs 19,000 people.
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