US private equity firm Apollo Global Management has announced a firm intention to make an offer for easyJet, moving the Luton-based carrier a step closer to private ownership after Castlelake confirmed on 6 August that it would not proceed with a bid.
Under the terms, easyJet shareholders will be entitled to £7.15 in cash for each share, valuing the airline's issued and to be issued share capital at approximately £5.7 billion. The acquisition will be structured through Eagle Bidco, a company indirectly owned by funds managed by Apollo.
The offer is 25p per share above Castlelake's final proposal of £6.90 and represents an 81% premium to easyJet's closing price of 394p on 28 May, the last trading day before Castlelake's interest in the airline became public.
The easyJet board has unanimously recommended the cash offer to shareholders.
The Haji-Ioannou family concert party, which includes founder Sir Stelios Haji-Ioannou, has given an irrevocable undertaking to support the transaction in respect of approximately 15.31% of easyJet's issued share capital.
"I am pleased with Apollo's strategic intentions for the easyJet business, which aim to create more growth," said Sir Stelios.
"The fact that Apollo, as one of the most well-resourced and experienced institutional investors in the world, has decided to back and grow easyJet, the leading member of the easy family of brands, is testament to the strength of the easy brand and the business model of easyGroup Ltd.
"My family and I intend to remain invested as long-term major shareholders of easyJet for the next chapter in the company's journey."
easyJet directors holding shares in the company have also agreed to vote in favour.
Eligible shareholders will have the option of a Stub Equity Alternative, exchanging their holding for unlisted shares in Apollo's new parent company on a one for one basis instead of taking cash.
Rollover shares are capped at 49.9% of the new parent company, so elections could be scaled back, with any balance settled in cash.
The board is recommending the cash offer but has not made a recommendation on the rollover alternative, noting that its suitability will depend on individual shareholders' circumstances.
Castlelake's withdrawal is treated as a statement under Rule 2.8 of the UK Takeover Code, which would ordinarily prevent it from returning with another proposal.
Castlelake had reserved the right to set that restriction aside if a third party, specifically including Apollo, announced a firm offer, and Apollo has now done so.
There is currently no indication Castlelake intends to re-enter the process.
Apollo and easyJet intend to complete the transaction through a court-approved scheme of arrangement. A scheme document setting out full terms, voting instructions and the meeting timetable is expected within 28 days of the firm offer announcement, unless the Takeover Panel agrees to a later date.
The scheme requires approval by a majority of voting shareholders representing at least 75% of the value of shares voted at the Court Meeting, along with a separate 75% resolution at easyJet's General Meeting.
The deal remains subject to merger control clearances, including in Austria, Germany and the UK, and foreign investment approvals in jurisdictions including France, Italy, Malta and Spain.
Apollo and easyJet expect completion by the end of the first quarter of 2027.
easyJet will remain listed and continue normal operations until the transaction completes. Apollo has said it supports easyJet's existing low-cost strategy and intends to maintain the current brand licence arrangement with easyGroup Ltd.
