Private equity giants Apollo Global Management and Castlelake have both submitted acquisition proposals, sparking a bidding war for the budget airline EasyJet. The company's European-listed shares surged significantly at the open, currently up 14%. The global aviation industry continues to face pressure, with tensions between the US and Iran straining jet fuel supplies.
The low-cost carrier EasyJet announced on Friday that it is evaluating a $7.7 billion takeover offer from Apollo Global Management, drawing the company into a tug-of-war between private equity firms. The news triggered a sharp rise in EasyJet's share price.
Under this all-cash proposal, EasyJet shareholders would receive £7.15 per share (equivalent to $9.61), valuing the entire company at £5.7 billion, or approximately $7.66 billion.
In addition to the cash consideration, Apollo is offering shareholders an alternative option to retain equity. Shareholders can choose to transfer their EasyJet holdings into the investment vehicle through which Apollo's fund would hold the airline.
Shareholders selecting this option would retain voting rights, with specific details subject to further negotiation.
The London-listed stock has gained 15.2% year-to-date.
EasyJet had previously agreed in principle to a $7.3 billion acquisition by private equity firm Castlelake, news which caused the stock to surge on Monday. However, the company stated on Friday that its board is now reassessing that prior position.
In its statement regarding the Apollo offer, EasyJet said: "This cash offer provides EasyJet shareholders with a higher cash return and superior value compared to the latest proposal from Castlelake. The board also believes the offer is attractive due to its valuation, strategic fit, and long-term operational security."
The company explicitly stated: "Consequently, the board of EasyJet no longer intends to recommend the Castlelake offer."
Castlelake's previous cash offer was $6.90 per share. The firm must issue a formal offer by August 3rd or withdraw from the process.
The Apollo bid represents a premium of approximately 22% over the stock's closing price on Thursday.
Compared to the closing price of £3.94 on the last trading day before the Castlelake offer window opened (May 28th), the Apollo bid represents a premium of about 81%.
The global aviation sector is currently facing a difficult environment, with ongoing US-Iran tensions squeezing jet fuel supplies. The International Air Transport Association warned last month that soaring fuel costs would cut the global airline industry's profits in half this year.
In the first half of 2026, EasyJet's losses widened further, with a pre-tax loss of £552 million compared to a loss of £394 million in the same period last year. The company stated that the ongoing conflict in the Middle East is impacting second-half operations, with higher fuel costs and industry uncertainty weighing on overall performance.
Analysts at Bernstein stated in a note on Friday morning that if Apollo completes the acquisition, the likelihood of EasyJet continuing its planned expansion would significantly increase.
The analysts added: "However, at the current offer price, for this deal to be value-accretive, the company would need to undertake a substantial cost restructuring, achieve an inflection to profitability, and deliver improvements far exceeding our current expectations."