Apollo Global Management agreed to buy EasyJet for $7.7 billion after Castlelake withdrew. EasyJet shares rose 3.1% in London. The deal is expected to close by Q1 next year.
Apollo Global Management agreed to buy EasyJet, valuing the UK budget airline at about $7.7 billion, after rival bidder Castlelake pulled its offer. EasyJet shares rose 3.1% in London on Thursday, recovering from an earlier drop when Castlelake’s exit was first reported.
Under the terms, EasyJet investors will receive £7.15 per share, a 54% premium to the closing price on February 27, the last trading day before the Middle East conflict escalated. The deal is expected to close by the end of the first quarter next year.
Castlelake, a major airline lender that leases planes to about 200 carriers, said in a statement it “does not intend to make an offer” after careful consideration. Its earlier bid of $7.3 billion had been accepted in principle by EasyJet. Apollo’s higher offer, tabled last month, changed the math.
Private equity interest in EasyJet has been building for months. The airline holds valuable landing slots at London Gatwick, Paris Charles de Gaulle, Geneva, and other key European airports. Those assets, combined with a strong balance sheet and a 31-year-old brand, made it a target. EasyJet shares were up nearly 50% year to date before Thursday.
“We welcome Apollo’s commitment to our business and our people, and believe that its experience in the aviation sector makes it a strong partner,” said EasyJet CEO Kenton Jarvis. Alex van Hoek, Apollo’s European private equity lead, called EasyJet “a leader in European aviation” with a “compelling customer proposition, expansive network and strong brand.”
Apollo’s APO stock page carries an AlphaScala score of 53 out of 100, a mixed signal. The firm’s growing aviation portfolio – it already owns a stake in Paris airport operator Groupe ADP – positions it to extract synergies from the EasyJet acquisition.
The deal removes a competing bidder and gives Apollo a controlling stake in one of Europe’s largest low-cost carriers. The transaction could revive stock market analysis of other European airlines with valuable slot portfolios, as private equity consolidation in the sector accelerates.
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