Apollo to take easyJet private in £5.7 billion deal after Castlelake exits

Apollo wins easyJet

Apollo Global Management agreed on Thursday to acquire easyJet for £5.70 billion ($7.7 billion), valuing Europe's second-largest budget carrier at £7.15 per share through its vehicle Eagle Bidco Limited. The price represents an 81% premium over easyJet's closing share price of £3.94 on May 28, the last trading day before Castlelake's interest became public. The deal, recommended by easyJet's board, will be paid in cash and is expected to close in the first quarter of 2027, after which the airline will delist from the London Stock Exchange.

The announcement followed Castlelake's withdrawal from the bidding war earlier on Thursday. The Minneapolis-based aviation investor, which made five proposals for easyJet over several months, confirmed it would not submit a formal offer. Its last public bid, made on July 5 at £6.90 per share, valued the airline at £5.5 billion ($7.41 billion). EasyJet shares fell 4.8% on the news.

The bidding war

Castlelake first disclosed its interest on May 29, prompting easyJet to call the timing "highly opportunistic" on June 1, citing a share price temporarily depressed by the Iran conflict. Castlelake privately submitted a £5.60 per share proposal on June 12, which easyJet rejected on June 16. Castlelake returned with £6.00 on June 17, then raised to £6.25 after a second rejection on June 20. EasyJet rejected the third proposal on June 21, calling it "cheap." Castlelake went public with £6.25 on June 22.

Apollo entered with a £7.15 per share offer on July 10, surpassing Castlelake's £6.90 public bid. EasyJet's board recommended shareholders accept the Apollo offer, and by that point was already advising shareholders not to back any Castlelake offer.

Shareholder and founder support

Founder Stelios Haji-Ioannou and his family, who own around 15% of easyJet, backed the Apollo takeover. The airline was founded in 1995 with flights from London Luton to Glasgow and Edinburgh, and now employs more than 19,000 people.

I am pleased with Apollo's strategic intentions for the easyJet business, which aim to create more growth.

He added that his family intended to remain invested as long-term major shareholders for the next chapter of the company's journey.

Non-executive chairman Stephen Hester said the board had carefully evaluated the proposal alongside easyJet's standalone prospects.

While we remain confident in the strength of our business and the opportunities ahead, we believe this offer appropriately recognises the quality of the business we have built and delivers immediate, certain and attractive value for shareholders.

Strategic rationale and open questions

Apollo, which also owns Wagamama-owner The Restaurant Group, has promised no job cuts for at least a year and confirmed the current management team. Analysts cited by Il Messaggero said Apollo believes easyJet is undervalued, pointing to the airline's commercial network, slots at airports including Gatwick, Milan Linate, Rome Fiumicino, Geneva, Amsterdam and Berlin, and the easyJet Holidays business as assets worth more than the transport operation itself.

Alex van Hoek, partner and European private equity lead at Apollo, said the firm was proud to be trusted to support easyJet in its next growth phase and its contribution to the European and UK aviation sector. Danni Hewson, AJ Bell head of financial analysis, noted that while £7.15 per share was a significant premium to pre-war levels, it remained short of the company's pre-pandemic highs.

The deal still faces a shareholder vote and regulatory scrutiny. A key complication is that Apollo is a US fund, while EU and UK legislation does not permit effective control of airlines by non-European entities, an issue the articles flag as unresolved.