EasyJet agrees to Apollo takeover after rival Castlelake ends bid

Apollo Global has agreed to buy European budget airline easyJet ESYJY in a deal that values the carrier at about £5.70-billion (US$7.7-billion), the companies said on Thursday, as rival suitor Castlelake abandoned its pursuit.

The deal ends months of uncertainty surrounding one of Europe’s biggest low-cost airlines as the industry grapples with rising costs from the Iran war.

Castlelake earlier on Thursday withdrew from the takeover race without giving a reason.

Castlelake had tabled five bids for easyJet before Apollo entered the fray in July, topping Castlelake’s £5.5-billion proposal and securing the backing of the airline’s board.

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Following the deal, Apollo anticipates that the family of easyJet founder Stelios Haji-Ioannou and other shareholders remaining invested will hold between 45.1 per cent and 49.9 per cent of the ordinary capital of the purchasing vehicle.

An EU management trust will hold up to 5 per cent, Apollo’s funds will hold the rest, up to a maximum of 49.9 per cent.

“Having carefully reviewed the proposal by Apollo, my family members and I have decided to support the recommended acquisition announced by the easyJet board,” Haji-Ioannou said in a separate statement.

EasyJet shares, which have rallied more than 65 per cent since the initial takeover interest was disclosed, were up 3.6 per cent at 675 pence.

The £7.15 per share offer, which easyJet’s board unanimously recommended, represents a premium of about 81 per cent to easyJet’s closing price of £3.94 on May 28, the last trading day before Castlelake’s interest became public.