easyJet Board Backs Apollo's £5.7 Billion Bid Amid Bidding War

The board of easyJet has approved a potential £5.7 billion offer from U.S. private equity firm Apollo, marking the low-cost airline as a major subject in an unexpected bidding war. On Friday, the company's board expressed its inclination to recommend the all-cash offer to shareholders, which values easyJet at 715 pence per share. Earlier this week, easyJet's board had agreed in principle to accept a £6.90 deal from Castlelake after the American private equity firm had upped its bid for the fifth time. However, analysts argued that Castlelake’s £5.5 billion offer significantly undervalued easyJet, prompting the board's reconsideration. In a shift of strategy, the easyJet board has now decided to back Apollo’s proposal. After careful review alongside its financial advisers, the board unanimously concluded that Apollo’s offer presents a compelling financial opportunity warranting a recommendation to easyJet shareholders. Consequently, the company’s board has shifted its support away from the Castlelake proposal. Apollo's latest offer also includes provisions for current shareholders to retain their stakes in the airline under Apollo's ownership, should the acquisition proceed, avoiding forced divestment upon delisting. In a statement, Apollo indicated its commitment to supporting easyJet’s current operational strategy and management team, signaling that there are no intentions to dismantle the company. The firm acknowledged the solid foundation of easyJet's existing methods, particularly its plans to evolve and enhance the low-cost carrier model through fleet upgrades, improving ancillary services and loyalty programs, and developing holiday packages that would provide a differentiated earnings model. Apollo emphasized that it values the significant contributions of easyJet’s management and workforce, indicating that retaining key employees will be critical for future success. The private equity firm has until August 7 to formalize its bid for the airline, positioning the ongoing negotiations as a critical juncture in easyJet’s trajectory. Related Sources: • Source 1 • Source 2