Easyjet heading to Apollo after Castlelake withdraws
Apollo has moved one step closer to taking control of Easyjet after rival bidder Castlelake pulled out of the bidding process.
The American private equity juggernaut said on Thursday it did “not intend to make an offer” for the low-cost airline, bringing an end to a takeover tussle between the two investors.
“Castlelake is very appreciative of the constructive engagement with the Easyjet board and management team,” the group said, after confirming it would not make a firm bid for the orange-liveried carrier.
Castlelake, a $38bn alternative investor headquartered in Minneapolis, had made a string of unsolicited offers for Easyjet between May and July, which were largely rebuffed by the airline’s board. Eventually it had a preliminary £5.5bn offer accepted, paving the way for the FTSE 250 group’s departure from the London stock market.
Castlelake withdrawal ends Easyjet bidding war
But the bid was trumped just days later by private markets juggernaut Apollo, which tabled its own £5.7bn offer. The board withdrew its support of Castlelake, backing Apollo’s more lucrative indicative proposal which it said provided “an attractive combination of value, strategic alignment and long-term stewardship”.
The two investment firms had been given until Friday to table firm offers by the Takeover Panel. Should Apollo follow through on its preliminary bid as is widely expected, the airline would be valued at 715p a share.
As part of any formal offer, New York-headquartered Apollo will be required to set out how it plans to adhere to the strict European Union laws on airline ownership, which dictate that aviation groups must be owned and controlled by EU citizens.
Solutions proposed to date include putting Easyjet into a European-based fund alongside a so-called stub equity arrangement in which eligible shareholders will be able to roll their existing shareholding into Apollo’s ownership vehicle.
Easyjet shares fell six per cent after Castlelake’s announcement, before erasing those losses to trade 2.8 per cent higher than their opening price.
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