Budget airline easyJet has agreed to a £5.7 billion acquisition by a US investment giant, Apollo Global. The Luton-based airline confirmed the “agreement in principle,” surpassing previous offers from American suitor Castlelake. Despite the surge in easyJet shares by 14% to 670p, investors are uncertain as Castlelake may still present a counter offer.
Apollo’s proposal entails easyJet shareholders receiving £7.15 per share, outbidding Castlelake, a private credit group with whom easyJet had been in discussions regarding a potential acquisition. The impact of the deal on easyJet’s customers and employees remains uncertain.
This acquisition trend aligns with the pattern of UK companies being acquired by foreign entities, delisted, or relocating overseas. Apollo’s offer represents an 81% increase over the share price on May 28 and exceeds the share value of the past four years.
Struggling to recover from the effects of the Covid crisis, easyJet’s shares have lagged behind competitors like Ryanair and British Airways’ parent company, IAG. Apollo highlighted easyJet’s growth potential and the value of its fast-expanding easyJet Holidays business in a statement.
Founded by Sir Stelios Haji-Ioannou in 1995, easyJet aimed to provide affordable European flights. Sir Stelios and family retain a 15.3% ownership stake in the airline. Analysts anticipate a competitive bidding process between Apollo and Castlelake, with Apollo having until August 7 to make a formal bid.
Chris Beauchamp, IG’s chief market analyst, remarked on the positive outlook for easyJet’s future despite recent performance setbacks. Apollo, known for its investments, acquired UK parcel delivery giant Evri in 2024.
