EasyJet Agrees £5.7bn Takeover Deal With Apollo After Castlelake Withdraws

Apollo has reached an agreement to acquire EasyJet for £5.7 billion in a cash deal, according to a joint announcement on Thursday. The acquisition follows the withdrawal of rival bidder Castlelake from the process, marking the first large European carrier to be held in private markets.

The New York-headquartered private markets juggernaut offered an 81 per cent premium to the airline’s closing price before investor interest emerged, and a 22 per cent premium to the shares’ four-year average.

EasyJet founder Stelios Haji-Ioannou backed the deal, stating he was pleased with Apollo’s strategic intentions for the company he started in 1994. Haji-Ioannou and his family intend to remain major long-term shareholders under the new ownership structure.

PJT Partners, Barclays, and Citigroup served as advisors to Apollo for the transaction.

Castlelake withdrawal ends bidding war

The agreement concludes a months-long takeover battle between Apollo and Castlelake. Castlelake, a Minneapolis-based alternative investor with $38bn, submitted several unsolicited offers between May and July, most of which the EasyJet board rejected.

The board initially accepted a preliminary £5.5bn offer from Castlelake, which would have led to the FTSE 250 group leaving the London stock market. However, the board shifted its support to Apollo after the firm tabled a more lucrative £5.7bn proposal.

The Takeover Panel had given both investment firms until Friday to submit firm offers. Castlelake eventually withdrew, stating it was very appreciative of the constructive engagement with the Easyjet board and management team but would not proceed with a firm bid.

EU ownership compliance and corporate structure

To comply with European Union laws requiring aviation groups to be majority owned and controlled by EU citizens, Apollo will own 49.9 per cent of the airline, according to the firm’s formal offer.

The deal relies on two specific arrangements to satisfy these regulatory requirements:

• Stelios Haji-Ioannou will roll his family’s cent stake into the new parent company.
• A five per cent stake will be placed into an EU trust.

This structure allows Apollo to maintain its investment while ensuring the carrier remains under the legal control of EU nationals.

Apollo’s aviation portfolio and market impact

The acquisition moves EasyJet into private markets, a departure from the model of other major European carriers. Most large flag carriers in Europe remain either listed on stock markets, such as Ryanair and Jet2, or are part of quoted groups like British Airways owner IAG.

Apollo has a history of investment in the aviation sector. The firm previously held stakes in Aeromexico and Sun Country Airlines, the latter of which Apollo listed on the Nasdaq in 2021. Additionally, Apollo’s private credit arm maintains a significant presence in the aviation industry.

The EasyJet board stated that Apollo’s proposal provided an attractive combination of value, strategic alignment and long-term stewardship.