Apollo’s £5.7bn bid for easyJet advances

EasyJet (EZJ.L) has agreed in principle to a takeover proposal from Apollo Global that values the airline at approximately £5.7 billion. The potential offer would see shareholders receive £7.15 per share in cash, and the board has stated it is minded to recommend the bid to investors. The company described the proposal as delivering a superior outcome for shareholders, reflecting the higher valuation placed on the business under Apollo’s terms.

The board’s stance marks a significant step in the sale process but does not yet amount to a final, binding deal. The agreement remains at an in-principle stage while detailed terms and documentation are worked through. Nonetheless, the clear indication of support from easyJet (EZJ.L)’s directors signals progress toward a full recommended offer.

Apollo’s move comes after an earlier in-principle agreement between easyJet and Castlelake, which had tabled a rival takeover proposal. Castlelake’s most recent terms valued easyJet at £6.90 per share, lower than the £7.15 now on the table from Apollo. That earlier Castlelake approach was understood to value the airline at around £5.5 billion.

In light of the new proposal, easyJet’s board has said it is no longer minded to recommend the Castlelake offer. This effectively positions Apollo as the preferred bidder, subject to completion of negotiations and any remaining conditions. The shift underscores the importance of price and overall package in determining which suitor secures board support.

Under Apollo’s proposal, shareholders would have access to a straightforward cash exit at £7.15 per share. In addition, Apollo plans to provide a Stub Equity Alternative, allowing eligible investors to roll their existing shareholding into the vehicle through which the Apollo funds would own easyJet. This structure is designed to give shareholders a choice between full cash realisation and continued economic exposure.

The detailed terms of the Stub Equity Alternative remain subject to further discussion. Apollo has also signalled that it supports easyJet’s current strategy and management and does not intend to break up the company, placing emphasis on retaining key staff. While the transaction is still progressing through its early stages, the board’s endorsement of Apollo’s superior financial terms places this bid at the centre of easyJet’s takeover discussions.