One of Europe’s largest budget carriers, Luton-headquartered EasyJet, has announced a major shift in its takeover stance, confirming it has backed a preliminary £5.7 billion acquisition proposal from U.S.-based alternative investment firm Apollo Management. The decision comes just days after the airline agreed in principle to a lower bid from competing U.S. investment group Castlelake.
In an official statement released this week, EasyJet’s board noted that Apollo’s offer of £7.15 per share delivers a far better result for shareholders compared to Castlelake’s previous proposal of £6.90 per share, which valued the carrier at roughly £5.2 billion. The board added it is now “no longer minded” to move forward with the Castlelake offer, ending days of back-and-forth bidding for the leading no-frills airline.
Founded and based in the United Kingdom, EasyJet operates more than 1,200 routes across 35 European countries, employs over 19,000 workers, and remains a cornerstone of European short-haul air travel. The latest development does not mean a final acquisition deal is locked in, however. Under UK takeover rules, Apollo has been given until 5:00 PM GMT on August 7 to submit a formal binding bid or withdraw from the process entirely, while Castlelake’s deadline for a firm offer is set for August 3.
The bidding war traces back to multiple initial approaches from Castlelake, all of which were rejected outright by EasyJet’s board. The airline previously accused the U.S. firm of attempting to acquire the company “on the cheap,” arguing that Castlelake’s bids were “highly opportunistic” and took advantage of a temporarily depressed share price. EasyJet noted that its stock had dropped to £3.94 per share by May 28 — the last trading day before takeover speculation became public — partially driven by travel sector volatility tied to geopolitical tensions over the Iran conflict. Apollo’s current offer represents an 81% premium over that May 28 share price.
A key regulatory hurdle remains for any potential takeover of EasyJet: European Union rules mandate that the airline must be majority-controlled by EU citizens to retain its operating rights across the bloc. To address this requirement, Castlelake had already arranged a partnership with two EU-based businessmen, former Ryanair and EasyJet executive Peter Bellew and industry veteran Mark Breen. The pair would hold majority control of the airline through an EU-registered holding company under Castlelake’s original proposal. It remains unclear how Apollo plans to structure its bid to comply with the same ownership rules, as the firm has not yet released details of its regulatory compliance strategy.
Market analysts note that the competing bids for EasyJet highlight growing investor interest in European travel infrastructure as the sector continues to recover from the aftermath of the COVID-19 pandemic, with low-cost carriers emerging as particularly attractive targets for global investment firms seeking stable long-term returns.