Apollo Global Management has emerged as a bidder for easyJet, submitting a £5.7bn takeover proposal that exceeds the latest offer from rival private equity firm Castlelake and intensifies the battle for control of the UK low-cost airline, according to a report by Bloomberg.
The firm’s all-cash proposal values EasyJet at 715 pence per share, surpassing Castlelake’s most recent 690 pence-per-share bid.
In a statement issued on Friday, EasyJet said Apollo’s offer represented a superior proposal and that the board was therefore “no longer minded” to recommend Castlelake’s bid. The airline added that, subject to the agreement of final terms, it would be prepared to recommend Apollo’s offer to shareholders.
The competing bid marks an unexpected development after months of negotiations between EasyJet and Castlelake. Castlelake had gradually increased its offers before the airline agreed to enter formal discussions after receiving a proposal of 650 pence per share. The investment firm subsequently improved its bid to 690 pence over the weekend.
Apollo said taking EasyJet private would provide the airline with access to additional capital and greater flexibility to pursue its long-term operational and strategic objectives outside the pressures of the public markets.
As part of its proposal, Apollo said shareholders would be offered the option to retain an investment in the airline through a “stub equity” structure, allowing them to roll over some or all of their existing shares into the privately owned business.
The firm also said it intends to address European airline ownership requirements, which mandate that EU carriers remain majority owned and controlled by European interests. Castlelake had previously sought to satisfy those rules by partnering with two Irish aviation executives.
