A takeover battle has emerged for easyJet after Apollo Global Management tabled a £5.7 billion bid for the British low-cost airline, overtaking a rival proposal from investment firm Castlelake and prompting the airline’s board to switch its support to the higher offer.
According to Reuters, Apollo has offered 715 pence per share in cash, valuing easyJet at approximately £5.7 billion, or around $7.7 billion. The proposal exceeds Castlelake’s earlier indicative offer of 690 pence per share, which the airline had agreed in principle to support only days before Apollo entered the contest. EasyJet’s board has now withdrawn its backing for Castlelake’s proposal and said it intends to recommend Apollo’s offer if a firm bid is made.
The emergence of competing bids has sparked one of the most significant takeover contests in the European aviation sector in recent years. According to MarketWatch, Apollo’s proposal has created a bidding war for one of Europe’s largest budget airlines, with investors responding positively to the prospect of a higher acquisition price. EasyJet shares climbed sharply following the announcement, reaching their highest levels in several years as markets anticipated the possibility of further offers.
Reuters reported that Apollo must submit a formal offer by 7 August under UK takeover rules, while Castlelake has until 3 August to decide whether it intends to improve its own proposal. Although the competition between the two firms could result in a higher final price, analysts believe Apollo currently holds the stronger position after securing the airline board’s support.
According to The Guardian, Apollo’s proposal offers more than just a modest increase in price. The private equity firm has pledged to maintain easyJet’s long-standing licensing agreement with easyGroup, the company controlled by founder Sir Stelios Haji-Ioannou, who remains the airline’s largest individual shareholder with a stake of around 15%. That commitment is viewed as an important factor because the continued use of the easyJet brand is central to the airline’s identity and future operations.
Reuters reported that Apollo has also indicated it intends to support easyJet’s existing management team and long-term growth strategy rather than pursuing a radical restructuring. The investment firm believes the airline has considerable untapped value despite recent challenges facing the aviation industry, including volatile fuel prices, inflationary pressures and the lingering effects of the COVID-19 pandemic on travel demand and investor sentiment.
According to MarketWatch, Apollo’s interest reflects growing confidence in the recovery of European aviation as passenger numbers continue to improve. Despite operational challenges and higher costs across the sector, easyJet has strengthened its financial position through growing demand for leisure travel and continued expansion of its package holiday business. Those improvements have helped restore profitability, although the airline’s share price has remained below pre-pandemic levels, making it an attractive target for private equity investors.
The Guardian reported that Apollo’s greater financial resources and experience may give it an advantage over Castlelake. While Castlelake is well known for aircraft financing and aviation investments, Apollo has a broader history of managing large-scale corporate acquisitions and supporting businesses through long-term investment strategies. Analysts quoted by the newspaper suggested that Apollo appears better placed to finance fleet expansion while maintaining investment in technology, customer service and operational efficiency.
According to Reuters, Apollo has also sought to reassure shareholders by allowing them the option of retaining an economic interest in the airline through an Apollo investment vehicle, rather than accepting an all-cash exit. That structure could appeal to investors who believe easyJet’s long-term growth potential remains strong but still wish to participate in future value creation under private ownership.
One of the biggest obstacles facing either bidder is likely to be regulatory approval. According to The Guardian, European Union ownership rules require airlines operating within the bloc to remain majority owned and effectively controlled by European interests. As Apollo is a US-based investment firm, any final transaction would need to be structured carefully to comply with those requirements, potentially through governance arrangements or ownership mechanisms that satisfy regulators.
Reuters noted that the airline industry has increasingly become a target for private investment firms seeking undervalued assets. EasyJet’s extensive network, valuable airport slots and sizeable owned aircraft fleet make it particularly attractive despite recent market volatility. The company continues to rank among Europe’s largest low-cost carriers, operating hundreds of aircraft across dozens of countries.
MarketWatch reported that investors will now closely monitor whether Castlelake returns with a higher bid before the regulatory deadlines expire. Even if Apollo ultimately succeeds, analysts expect the negotiations to remain closely watched because the transaction could become one of the largest private equity acquisitions involving a European airline.
According to The Guardian, the potential takeover also highlights broader concerns about London’s stock market, where several established listed companies have attracted overseas buyers after prolonged periods of relatively weak valuations. EasyJet’s situation has become another example of international investors identifying opportunities among UK-listed businesses whose market values may not fully reflect their long-term prospects.
As reported by Reuters, MarketWatch and The Guardian, Apollo currently appears to have the upper hand in the contest for easyJet after securing board support with its improved £5.7 billion proposal. While Castlelake still has an opportunity to respond, Apollo’s combination of a higher valuation, commitments to preserve the airline’s brand and strategy, and its reputation as a major global investment firm have positioned it as the leading contender. The coming weeks are expected to determine whether the takeover proceeds as planned or develops into an even more competitive bidding battle.