SouthernWorldwide.com – British budget airline EasyJet announced on Friday that it has reached an agreement in principle to be acquired by U.S. private equity firm Apollo in a deal valued at £5.7 billion (approximately $7.7 billion). This offer surpasses a competing bid from another American private equity investor, Castlelake.
The new offer from Apollo signals the potential for a bidding war between the two U.S. investment firms over the ownership of the airline.
Apollo’s proposed price of £7.15 per share is higher than Castlelake’s offer of £6.90 per share, which was valued at $6.7 billion. Apollo’s bid is approximately $1 billion greater.
EasyJet stated that Apollo’s proposal offers a “superior outcome” for its shareholders. Consequently, the airline’s board has indicated it is “no longer minded to recommend the Castlelake proposal.”
Under U.K. regulations, Apollo has until August 7 to finalize its offer or withdraw from the potential acquisition.
EasyJet, which is listed on the London Stock Exchange, had previously agreed to be taken private by Castlelake. This agreement followed Castlelake’s fifth revised proposal, which was accepted by the airline on Sunday.
Although EasyJet had initially rejected earlier offers from Castlelake, it opened the door to discussions on June 25. The airline granted the U.S. fund access to its commercial information, hoping to secure a more attractive proposal.
In May, EasyJet reported a 27 percent increase in losses for the first half of its financial year, reaching £377 million. This rise in losses was attributed to soaring fuel prices and disrupted travel plans, exacerbated by the US-Iran conflict.
The company cautioned that the second half of the year would also be impacted. However, Chief Executive Kenton Jarvis expressed confidence that the airline was “well placed” to navigate the prevailing turbulence.
