EasyJet Shares Soar as Apollo Trumps Rival Bidder in £5.7bn Takeover Battle

EasyJet (LON: EZJ) shares have surged on Friday after the budget airline confirmed it has agreed in principle to a sweetened £5.7 billion takeover proposal from US private equity giant Apollo Management, gatecrashing a deal the carrier had only just struck with rival suitor Castlelake days earlier.

Apollo is offering £7.15 per share in cash, comfortably outbidding Castlelake’s £6.90-per-share proposal, which easyJet’s board had provisionally accepted at the weekend.

The Luton-based airline said Apollo’s offer represented “a superior outcome” for shareholders and confirmed it is now “no longer minded” to recommend the Castlelake proposal.

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The Apollo offer represents an 81% premium to easyJet’s share price on 28 May, the last trading day before the Castlelake offer period began, and an 80% premium to the stock’s 90-day volume-weighted average price.

Investors reacted swiftly, sending easyJet shares climbing towards the offer price as the market priced in a higher probability of a deal completing at improved terms.

Stub Equity Alternative on the Table

Beyond the headline cash figure, Apollo is also proposing a “Stub Equity Alternative,” allowing shareholders to roll part of their holding into the new ownership vehicle rather than cashing out entirely, giving them continued exposure to the airline’s growth.

The private equity firm, which has backed the deal with committed equity and debt financing arranged through Barclays, said it intends to preserve the easyJet brand and its licensing arrangement with easyGroup, while investing further in fleet upgrades, ancillary revenue and the Holidays business.

Board Backing and Next Steps

EasyJet’s board has unanimously indicated it would recommend Apollo’s terms, though the proposal remains conditional on due diligence, definitive documentation and director undertakings.

Under Takeover Panel rules, Apollo must announce a firm offer or walk away by 5pm on 7 August 2026. Shareholders have been advised to take no action for now as the bidding contest continues.