Budget airline easyJet has agreed to a £5.7 billion acquisition by a US investment giant, Apollo Global. The Luton-based airline disclosed that it had reached a preliminary agreement with Apollo, surpassing previous offers from another American contender, Castlelake. Shares of easyJet surged by 14% to 670p in early trading on Friday amid speculation that the deal is not yet finalized.
Apollo’s proposal entails offering easyJet shareholders £7.15 per share. This move by Apollo follows discussions between easyJet and Castlelake, a private credit group, regarding a potential acquisition.
The impact of this potential deal on easyJet’s customers and employees remains uncertain. However, it would mark another instance of UK-listed companies being acquired by foreign entities, going private, or relocating their listings overseas.
According to easyJet, Apollo’s bid represents an 81% increase over the closing price of £3.94 per share on May 28, before Castlelake’s interest in a takeover was revealed. This offer also exceeds the share price performance of the past four years.
Struggling to recover from the effects of the Covid crisis, easyJet’s shares have lagged behind competitors like Ryanair and British Airways owner IAG. Apollo expressed admiration for easyJet as a valuable player in the global aviation industry with substantial long-term growth prospects.
Founded in 1995 by Sir Stelios Haji-Ioannou, easyJet aimed to provide affordable air travel in Europe. The airline, which still counts Sir Stelios and his family as owners of 15.3%, inaugurated its first flights from Luton to Glasgow and Edinburgh in November 1995.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, commented that shareholders of easyJet are in for an exciting journey with Apollo’s entrance into the bidding process. Apollo’s offer is currently favored, pending a formal bid by August 7, while Castlelake could potentially revise its terms.
Chris Beauchamp, chief market analyst at IG, noted the emergence of a second suitor for easyJet and emphasized the company’s growth potential despite recent lackluster performance. However, he cautioned against the risks associated with increasing debt during the acquisition process.
Among Apollo’s UK investments is the parcel delivery company Evri, acquired in 2024.
