- Apollo Global Management acquires EasyJet for £5.7bn at £7.15 per share
- Castlelake withdrew after submitting five proposals and losing board support
- Founder Stelios Haji-Ioannou and family back the deal with 15.3pc ownership
- Apollo’s ownership capped at 49.9pc to satisfy EU airline ownership regulations
- EasyJet profits tumbled 70pc to £85m in the quarter ending June
Apollo Global Management has won its battle with Castellake to take over England’s low cost airline Easyjet with a £5.7bn (€6.65bn / $7.7bn) cash offer, after rival bidder Castlelake abandoned its months-long pursuit.
The US private equity giant is acquiring the budget airline at £7.15 per share, representing an 81pc premium over EasyJet’s stock price before the takeover battle commenced. The deal will take EasyJet private and delist the carrier from the London Stock Exchange, marking one of the largest private equity acquisitions in European aviation history
The bidding war concluded after Castlelake submitted five sequential proposals, initially securing board recommendation for a £5.5bn deal at £6.90 per share in early July. Apollo Global Management gatecrashed the process days later with a superior offer, causing the EasyJet board to withdraw its support for Castlelake. Facing a rigid regulatory deadline to raise its bid or withdraw, Castlelake formally announced it would not make a further offer, clearing the path for Apollo’s solo victory. Founder Sir Stelios Haji-Ioannou and his family, who hold 15.3pc of the airline, fully back the deal, with Apollo’s ownership capped at 49.9pc to maintain compliance with strict EU airline ownership rules.
The definitive agreement was secured after rival suitor Castlelake abandoned its months-long pursuit, walking away just before the English stock exchange takeover panel’s “put up or shut up” deadline. The deal will take the prominent European budget airline private and delist it from the London Stock Exchange.
Apollo is acquiring EasyJet at £7.15 per share in cash. The final bid values the airline at £5.7bn. This is an 81pc premium over EasyJet’s stock price prior to the takeover battle. Founder Stelios Haji-Ioannou and his family—the largest shareholders at 15.3pc—fully back the deal. Apollo’s ownership will be capped at 49.9pc, allowing the airline to maintain compliance with strict EU airline ownership rules. Shareholders also have a “Stub Equity Alternative” to roll over their existing equity into Apollo’s investment vehicle.
US investment firm Castlelake submitted five sequential proposals in a strategy advised by Irish aviation experts Peter Bellew and Mark Breen. In early July, they initially secured board recommendation for a £5.5bn deal (£6.90 per share). Days later, Apollo Global Management gatecrashed the deal with a superior £7.15 per share offer. This caused the EasyJet board to withdraw its support for Castlelake. Facing a rigid regulatory deadline to either raise its bid or walk away, Castlelake formally announced it would not make a further offer. This cleared the path for Apollo’s solo victory.
EasyJet shares initially rose15pc when Apollo first gatecrashed the bidding process in July. Following Castlelake’s formal exit from the bidding war, EasyJet shares experienced a downward correction in London afternoon trading as the possibility of a further bidding war evaporated.
EasyJet became an attractive private equity target after its stock price was heavily battered by rising jet fuel costs and sliding consumer confidence tied to geopolitical conflicts. Profits for the quarter ending June tumbled by 70pc to £85 million.
Apollo has stated it strongly supports EasyJet’s current operational strategy. The private equity house plans to retain key management and focus heavily on expanding EasyJet’s highly profitable holiday package division and capacity slots.
