Shares of EasyJet saw a rise of approximately 3.1% following the announcement that U.S. private equity firm Castlelake has abandoned its plans to acquire the airline. This withdrawal clears the way for Apollo Global Management, which had previously made an offer to take EasyJet private at a valuation of around $7.7 billion.
The deal is anticipated to be completed by the end of the first quarter of next year. Castlelake's decision came after it stated that it would not pursue an offer for EasyJet, which initially caused the airline's shares to drop over 6% before recovering.
Under the terms of Apollo's offer, EasyJet investors would receive £7.15 per share, reflecting a 54% premium over the airline's closing price on February 27, just before the escalation of the Middle East conflict. Apollo's interest in EasyJet follows a previous bid from Castlelake, which had proposed a valuation of $7.3 billion, an increase from an earlier rejected offer of $6.64 billion.
The heightened interest from private equity firms has contributed to a nearly 50% increase in EasyJet's share price leading up to this announcement. EasyJet is considered an appealing target for private equity due to its valuable landing slots at major European airports.
EasyJet's CEO, Kenton Jarvis, expressed optimism about Apollo's commitment to the airline, highlighting its potential to accelerate growth and enhance customer service. Apollo's European private equity lead, Alex van Hoek, emphasized EasyJet's strong market position and its role in improving connectivity across Europe and the UK