Budget carrier easyJet has agreed to a £5.7 billion acquisition by a US investment firm. The airline, headquartered in Luton, revealed that it had struck a preliminary deal with Apollo Global, surpassing previous offers from another American contender, Castlelake. Despite this, Castlelake could still return with a competing bid. Following the announcement, easyJet’s shares surged by 14% to 670p in early trading on Friday as investors speculated on the ongoing negotiations.
Under Apollo’s proposal, easyJet shareholders would receive £7.15 per share. The move by Apollo comes after easyJet had discussions with Castlelake, a private credit group, regarding a potential buyout. The implications of this acquisition on easyJet’s customers and employees remain uncertain.
This acquisition would add easyJet to the growing list of UK-listed companies being acquired by foreign entities, taken private, or relocating their listings overseas. The offer from Apollo represents an 81% increase over the closing share price of £3.94 on May 28 and surpasses the share value of the past four years by over a fifth.
Struggling to recover from the setbacks during the Covid pandemic, easyJet’s shares have trailed behind competitors like Ryanair and British Airways’ parent company, IAG. In a stock market statement, Apollo emphasized easyJet’s strong position in the global aviation sector and highlighted the potential growth of its easyJet Holidays business. The statement also emphasized the importance of retaining key personnel within the easyJet Group.
Founded by Sir Stelios Haji-Ioannou in 1995, easyJet aimed to provide affordable air travel in Europe. The airline’s first flights took off in November 1995, connecting Luton to Glasgow and Edinburgh. Sir Stelios and his family still hold a 15.3% stake in the airline. Financial analysts are optimistic about the potential for easyJet under Apollo’s bid, although there is still room for Castlelake to counteroffer before the final decision deadline on August 7.
Apollo, known for its investments in various sectors, including UK-based companies like Evri, has expressed confidence in the future prospects of easyJet. The potential acquisition would mark a significant development in the airline industry landscape, with implications for both stakeholders and the broader market.