EasyJet is very likely to become American, but its future owner will no longer be the same. After recommending the latest proposal from theAmerican investor Castlelake A new offer has come to shake up the game.
Last Friday, the board of easyJet backed a higher takeover offer from the US fund Apollo, thereby withdrawing its previous support for Castlelake's competing proposal.
Apollo proposes to acquire the low-cost airline for £5.7 billion (€6.7 billion), valuing easyJet at £7.15 (€8.40) per share. This offer exceeds Castlelake's latest proposal, which amounted to £5.5 billion, or £6.90 ($9.31) per share.
The company stated that its board of directors had unanimously concluded that the financial terms of Apollo's offer were sufficiently attractive to be recommended to shareholders, thus reversing its previous position in favour of Castlelake. Consequently, the Board is no longer prepared to recommend the Castlelake proposal. », said easyJet.
Apollo states its intention to support easyJet's current strategy rather than dismantle or restructure the low-cost carrier. The fund has also committed to retaining the current management team and continuing investments in fleet renewal, ancillary revenue, the loyalty programme, and the development of the tour operator arm, easyJet Holidays.
To please current shareholders
One of the particularities of Apollo's offer is that it would allow current shareholders to retain a stake in the company, rather than being forced to sell their shares as Castlelake wished.
This arrangement could be of particular appeal to easyJet’s founder, Stelios Haji-Ioannou, and his family, who together hold more than 15 % of the share capital. Apollo has also stated that it will maintain the easyJet brand licence agreement, under which Stelios Haji-Ioannou receives royalties.
Apollo also has until 7 August to submit a firm offer. The fund has indicated that it will also take all necessary measures to comply with EU rules requiring an airline to remain majority-owned and controlled by European investors.
