EasyJet accepts £5.7bn Apollo takeover offer

EasyJet said on July 10 that it had accepted a £5.7 billion takeover offer from US private equity firm Apollo, topping a rival proposal from American investor Castlelake.

The British low-cost airline said it had reached an agreement in principle with Apollo after its offer of £7.15 per share beat Castlelake's £6.90-per-share bid. EasyJet said the Apollo proposal gave shareholders a superior outcome and that its board was no longer minded to recommend Castlelake's offer.

Before Apollo's approach, EasyJet had looked set to be taken private by Castlelake after accepting its fifth bid on Sunday.

EasyJet shares rose 14.5 percent to £6.73 in early London trading on July 10, still below both offer prices.

Apollo has until August 7 to make a firm offer or walk away under UK regulations. Castlelake has until August 3.

Foreign entities cannot take full ownership of EasyJet outright because UK and European rules require the airline to be majority owned and controlled by regional nationals. Under Castlelake's proposal, 51 percent of the carrier would be owned by European Union nationals including Peter Bellew and Mark Breen. Apollo said it would take steps to find a European partner but did not give details.

In May, EasyJet reported that its first-half losses had deepened by 27 percent to £377 million and warned that the second half of the year would also be affected.