EasyJet backs Apollo £5.7 billion takeover offer

• EasyJet agreed in principle to recommend Apollo Global Management’s £5.7 billion cash offer after receiving a higher bid.
• EasyJet shares rose about 15% to roughly £6.75 following the announcement.
• Apollo said it plans to retain the easyJet brand and seek required regulatory approvals.

EasyJet agreed in principle to Apollo Global Management’s (NYSE:APO) £7.15 per share cash offer, valuing the airline at about £5.7 billion, after the board determined it was a higher proposal than Castlelake’s £6.90 per share offer.

The decision came days after easyJet accepted Castlelake’s proposal, but the airline said it was no longer recommending that offer after Apollo submitted a higher bid.

“EasyJet is well placed to weather the turbulence,” said easyJet Chief Executive Officer Kenton Jarvis following the airline’s recent financial update.

The Apollo offer represents an 81% premium to easyJet’s closing share price of £3.94 on May 28, before takeover interest became public, while the airline reported a headline loss after tax of £377 million for the six months ended March.

EasyJet shares rose about 15% to approximately £6.75 following the announcement, although the stock remained below Apollo’s £7.15 offer price as investors considered regulatory risks and transaction uncertainty.

EasyJet reported revenue of £3.95 billion for the six months ended March, up 12% year over year, but warned higher fuel costs and weaker booking visibility could affect second-half performance.

Apollo’s proposal must address European Union ownership rules requiring airlines operating within the bloc to be majority owned and controlled by EU nationals or qualifying European entities, while both bidders face takeover deadlines in August.