Easyjet accepts rival takeover bid from US investor Apollo worth £5.7bn
Easyjet has asked investors to accept a rival takeover bid worth £5.7billion from another US investor, as it eyes an exit from the London market.
The budget airline, set up by Sir Stelios Haji-Ioannou in 1995, said it had reached an agreement ‘in principle’ with US investment giant Apollo, trumping a bid from Castlelake earlier this week.
‘The proposed cash offer delivers a superior outcome for easyJet shareholders by providing a higher cash value than Castlelake’s latest proposal of £6.90 per easyJet share,’ the London-listed airline said in a statement.
Shares rose 13.3 per cent to 666p in early trading, bringing its total gains this year to 29.7 per cent.
Easyjet on Sunday had agreed in principle to a £5.5billion takeover bid from US investor Castlelake before receiving an improved offer from Apollo on Wednesday.
For sale: Easyjet agreed to a takeover bid in principle earlier this week before it was trumped by Apollo
Apollo’s £7.15 a share offer represents an 81 per cent premium to Easyjet’s closing price of £3.94 before Castlelake’s bid.
If Apollo’s bid is successful, it would add to the asset manager’s growing portfolio of airlines. It part-owns Atlas Air and last year its private credit arm lent $745million to Virgin Atlantic for its take-off and landing slots at Heathrow airport.
Apollo must announce a firm offer for Easyjet by August 7 or walk away. Castlelake has until August 3.
Easyjet rejected four of Castlelake’s previous bids, with the airline’s bosses branding previous proposals ‘highly opportunistic’ and accusing the firm of trying to secure a deal ‘on the cheap’.
It marks another blow to the London stock market, which has seen a frenzy of takeover activity from foreign buyers. Other targeted companies include Tate & Lyle, Beazley, Schroders and the owner of William Hill.
FTSE 100 warehouse firm Segro this week rejected an ‘opportunistic’ £12.6billion bid from US firm Prologis but has not rejected the idea of a sale at a ‘more attractive’ level.
Easyjet has long been considered a takeover target as its share price languished in the wake of the pandemic, as its recovery lagged its European rivals.
Any bid for Easyjet is likely to require the backing of Easyjet founder Sir Stelios and his family, who still own a 15.3 per cent stake in the company.
Although the family has not commented publicly, sources last month told the Mail he was likely to accept an ‘eyewatering’ bid.
‘It would need to be an eyewatering large price to persuade him and the family to sell,’ the source told the Mail.
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