The British airline easyJet announced on the 10th that it has agreed in principle to accept a takeover offer valued at £5.7 billion (approximately $7.64 billion) from the American private equity giant Apollo Global Management. Concurrently, easyJet has withdrawn its prior recommendation of an acquisition proposal from another U.S.-based investment firm, Castlelake.

According to a joint statement released by the two companies, Apollo's offer stands at £7.15 per share, representing a significant premium of 81% over easyJet's closing share price on May 28th. Regarding the transaction structure, eligible easyJet shareholders will have the option to forgo a cash payout and instead convert their existing shares into equity in a specific investment vehicle controlled by an Apollo-managed fund. EasyJet stated that, in accordance with relevant regulations, Apollo must submit a formal takeover offer by August 7th, or the bid will be considered withdrawn. While easyJet currently advises shareholders to take no immediate action, the board has clearly indicated its preference to recommend Apollo's latest proposal to shareholders.

This bidding contest between the two private equity giants has involved several rounds of back-and-forth negotiations. As recently as the 6th of this month, easyJet had agreed in principle to accept Castlelake's fifth-round proposal. That offer valued easyJet's equity at £5.23 billion (£5.52 billion on a fully diluted basis), equating to £6.90 per share, which had previously triggered a sharp surge in easyJet's share price. With Apollo's higher offer now on the table, easyJet has ultimately chosen to proceed with the new suitor.