EasyJet set for £5.7bn Apollo takeover after rival bidder Castlelake walks away

Ahead of a deadline on Friday, Castlelake confirmed it did not intend to make a formal takeover offer, allowing Apollo to progress with its deal.

The move will see the US firm, which also owns Wagamama-owner The Restaurant Group, pay shareholders 715p per share for the business.

The deal, which will require approval at a shareholder vote, is expected to complete in the first quarter of 2027.

EasyJet was founded by Sir Stelios Haji-Ioannou in 1995 to offer a low-cost alternative to British Airways and it has since expanded to be one of the largest networks across Europe.

Sir Stelios and his family, who own around 15% of the business, have given the takeover their support.

“I am pleased with Apollo’s strategic intentions for the easyJet business, which aim to create more growth,” he said.

“My family and I intend to remain invested as long-term major shareholders of easyJet for the next chapter in the company’s journey.”

Sir Stephen Hester, non-executive chairman of easyJet, said: “The easyJet board has carefully evaluated the proposal from Apollo alongside easyJet’s standalone prospects.

“While we remain confident in the strength of our business and the opportunities ahead, we believe this offer appropriately recognises the quality of the business we have built and delivers immediate, certain and attractive value for shareholders.”

Bosses at Apollo said they believe the airline is “one of the most attractive businesses” in the global aviation sector.

Alex van Hoek, partner and European private equity lead at the firm, said: “We are proud to be trusted to play a lead role supporting the easyJet Group in this next phase of its growth and furthering its important contribution to the European and UK aviation sector.”

AJ Bell head of financial analysis Danni Hewson said: “It’s been a tough few months for airlines as the cost of jet fuel shot up and nerves about summer shortages impacted many people’s booking decisions.

“Having fewer bums on more expensive seats has created the kind of turbulence that private equity is always sensitive to, and as EasyJet’s share price dropped the European airline began to look like an increasingly tasty morsel.

“Cue not one, but two suitors entering the ring, with Castlelake unsuccessful after seemingly being gazumped following months of negotiations which almost got across the line.

“In the end it was Apollo that came up with the magic number of £7.15 per share. That’s a significant premium to where EasyJet’s shares were trading before the Iran war, but it’s a figure that’s still woefully short of the company’s pre-pandemic highs.

“Although there are no guarantees those halcyon days will return, with so many pressures on the airline.

"EasyJet is still recovering from those months when planes were grounded, despite the robust recovery as people rediscovered their love of travel and placed holidays firmly in the ‘required spending’ bracket.

“Whilst there are still significant hurdles for this deal to clear, not least European regulators with strict requirements for ownership of airlines, the potential loss of another well-known name from London markets will be seen as a blow.

“Air travel might not be as sexy as space travel, but retail investors understand it and names like EasyJet can’t easily be replaced.”

EasyJet’s inaugural flights took off in November 1995 flying from Luton to Glasgow and Edinburgh.

In 1996, easyJet launched its first international route, from London Luton to Amsterdam, with further routes to Nice and Barcelona following that year.

In 1998, easyJet.com was launched for online bookings. In the same year, Swiss operations are launched as easyJet purchases 40% TEA Basel, which later became easyJet Switzerland. Two years later, easyJet went public and was listed on the London Stock Exchange at an offer price of £310p valuing the company at £777m. It also raised significant capital for further expansion.