EasyJet agrees to rival £5.7bn takeover bid

EasyJet Tentatively Approves £5.7bn Takeover Bid from Apollo Management

EasyJet agrees to rival 5 7bn takeover - Following a competitive bidding process, the no-frills airline based in Luton has tentatively accepted a £5.7bn takeover proposal from Apollo Management, a US firm. This decision comes after the company had earlier agreed in principle to a rival offer from Castlelake, another US investment firm, just days prior.

Apollo's bid offers shareholders £7.15 per share, surpassing Castlelake's previous proposal of £6.90 per share. EasyJet now claims it is no longer inclined to support Castlelake's offer, which had initially been rejected due to concerns over being undervalued.

Key Details of the Takeover Offers

EasyJet, one of Europe's leading carriers, operates over 1,200 routes across 35 countries and employs more than 19,000 staff. The airline's share price has risen significantly since the takeover discussions began, with Apollo's offer representing an 81% increase from its level on 28 May.

"Apollo's bid provides a more favorable result for investors than the earlier proposal," EasyJet stated, emphasizing its preference for the new offer.

The company had previously criticized Castlelake's approach, calling it "highly opportunistic" and accusing the firm of attempting to acquire EasyJet "on the cheap." This led to a temporary decline in the airline's stock price, attributed in part to the impact of geopolitical tensions on the travel industry.

While EasyJet has reached an agreement in principle with Apollo, the deal remains conditional. Apollo has until 17:00 on 7 August to finalize its bid, while Castlelake's deadline to secure a deal was earlier, on 3 August. The outcome will depend on meeting regulatory requirements, including EU rules that mandate majority ownership by citizens of the European Union.

Apollo's proposal includes forming a partnership with two EU-based individuals, Peter Bellew and Mark Breen, who would control a company holding majority stakes in EasyJet. This structure aims to satisfy the EU's ownership criteria, though final approval is still pending.

Final Status of Takeover Agreements

EasyJet has agreed to the £5.7bn takeover bid from Apollo, marking a shift in its strategic direction. The airline's acceptance of this offer signifies a temporary resolution to the bidding war, but a formal deal is yet to be finalized.