EasyJet Accepts Apollo's £5.7 Billion Takeover Bid After Rival Castlelake Walks Away

EasyJet has agreed to a £5.7 billion takeover by US private equity firm Apollo, ending a bidding war that started earlier this summer when Minneapolis-based Castlelake first made a run at the budget airline.

Castlelake announced Thursday it would not make a final offer, clearing the way for Apollo's bid. In a stock exchange statement, Castlelake said only that it does not intend to make an offer for easyJet, thanking the board for its time. The firm did not explain why it walked away.

In early July, Castlelake had secured board backing for a £5.5 billion deal at £6.90 a share, according to the Irish Times. Five days later, Apollo came in higher, offering £7.15 a share, or roughly £5.7 billion. The UK Takeover Panel had set a Friday deadline for both firms to table a firm offer, and Castlelake chose to fold rather than raise its bid.

EasyJet's board and its largest shareholder both signed off on the winning bid. Chairman Stephen Hester said Apollo's offer "appropriately recognises the quality of the business we have built and delivers immediate, certain and attractive value for shareholders," according to the Irish Times. Sir Stelios Haji-Ioannou, who founded easyJet in 1995 and holds about 15% of shares with his family, said he backed the deal and was "pleased with Apollo's strategic intentions for the easyJet business."

Haji-Ioannou isn't cashing out entirely. Under the deal terms, he'll roll his investment over into the airline once it goes private, saying he intends to remain a long-term major shareholder. The Guardian reports his stake would otherwise be worth around £855 million if sold outright at the offer price.

Apollo partner Alex van Hoek called easyJet "a leader in European aviation" with a "differentiated market position" built on its brand and network, according to the BBC. EasyJet chief executive Kenton Jarvis welcomed Apollo's "commitment to our business and our people," saying the firm's aviation experience makes it a strong partner.

EasyJet's shares rose 3.1% to 672p on the news, the Irish Times reported, though that's still below the £7.15 offer price. The gap reflects deal-closing risk and timeline uncertainty rather than doubt about the terms themselves.

When Castlelake's interest first surfaced, investors had signaled they wanted a price above £7 a share, or around £5.3 billion, according to the Irish Times. Apollo's £7.15 offer clears that bar, but the two-horse race some investors hoped would push the price even higher ended the moment Castlelake bowed out.

EasyJet has had a rough stretch by any measure. The Irish Times notes its shares have been among the hardest-hit in the airline sector since the Iran war began in February, which makes a guaranteed cash payout at a premium more attractive to shareholders than betting on a standalone recovery.

The deal now moves toward formal shareholder and regulatory approval, standard steps for a takeover of this size involving a UK-listed company with 19,000 employees and roughly 1,200 routes across 35 European countries, including operations in Belfast and Derry.

Apollo has said it's "highly supportive" of easyJet's existing strategy and sees room to "accelerate operational and commercial ambitions." Private equity buyouts of airlines have a mixed track record globally, and the firm has not detailed specific plans for routes, staffing, or fleet investment once the deal closes.