Apollo enters bidding war for EasyJet, offering higher price than Castlelake
A second potential buyer has emerged for the airline EasyJet, potentially sparking a bidding war. Following an offer from U.S. investment firm Castlelake in late May, another American investor, Apollo, has now expressed interest in acquiring the company. Initially, EasyJet's board planned to recommend that shareholders accept Castlelake's offer of 6.90 British pounds per share. However, EasyJet is now withdrawing this recommendation because Apollo has proposed a higher bid of 7.15 pounds per share. This offer from Apollo would value the airline at approximately 5.7 billion pounds. Consequently, EasyJet now intends to advise its shareholders to sell their shares to Apollo. Apollo has until August 7 to submit a definitive offer. EasyJet ranks as Europe's fifth-largest airline by passenger numbers, trailing Ryanair, Lufthansa Group, IAG (which includes British Airways and Iberia), and Air France-KLM. Apollo, founded in 1990, has a diverse investment portfolio including insurance and real estate, and has prior experience in the aviation sector, having provided loans to Air France-KLM during the COVID-19 pandemic. The firm manages over $1 trillion in investments. In contrast, Castlelake, established in 2005 in New York, manages approximately $38 billion in investments and typically focuses on acquiring undervalued companies, aiming to increase profitability through cost-saving measures before divesting. Castlelake has also recently expanded its focus to include the aviation industry.
The emergence of a second, higher bid for EasyJet highlights the dynamic nature of private equity interest in established aviation assets. This situation presents a classic scenario where competing financial sponsors leverage market conditions and asset performance to gain control, potentially leading to increased shareholder value through competitive pricing. The differing scales of Apollo and Castlelake's investment portfolios suggest distinct strategic approaches, with Apollo's broader reach and prior aviation exposure potentially offering different synergies or integration pathways compared to Castlelake's more focused, value-oriented strategy. The outcome will likely depend on EasyJet's board and shareholder assessment of long-term value creation versus immediate financial gain, with regulatory scrutiny and operational integration challenges being key considerations for either bidder in the evolving aviation landscape.
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