Apollo Enters Bidding War for easyJet with £5.7bn Takeover Offer

US private equity firm Apollo has launched a surprise £5.7 billion takeover offer for easyJet, valuing the airline at £7.15 per share. The carrier's board has unanimously decided to recommend this all-cash proposal to shareholders, effectively signaling a shift away from a previous £5.5 billion deal agreed in principle with rival firm Castlelake. The move has triggered a significant market response, with easyJet shares surging 14% on the prospect of an intense bidding war.

This change in direction follows widespread analyst criticism that the previous Castlelake proposal significantly undervalued the business. Apollo has expressed support for easyJet's existing low-cost strategy, specifically focusing on fleet upgrades, loyalty programs, and holiday scaling. The deal structure provides current shareholders, including founder Stelios Haji-Ioannou—who maintains a 15% stake—with the option to remain invested, while also retaining the existing brand licensing arrangements that generate royalties for the founder.

The acquisition requires navigating complex EU foreign ownership regulations, which remain applicable to easyJet post-Brexit. Apollo has committed to taking all necessary steps to meet these mandates, similar to efforts previously explored by Castlelake. With a deadline of 7 August for a firm offer, the coming weeks will determine the ultimate ownership structure of one of Europe's largest low-cost operators. The outcome remains highly significant for the aviation sector's consolidation trends and the future of low-cost carrier business models.