easyJet under Apollo ownership: What it means for passengers and shareholders

easyJet’s board has recommended a £7.15-a-share takeover offer from Apollo, bringing the airline a step closer to private ownership after rival bidder Castlelake withdrew from the contest.

However, the agreement is not yet a completed acquisition. Shareholders must vote on the transaction, regulators must approve it, and the High Court must sanction the deal before Apollo can take control.

Apollo makes firm offer for easyJet

Apollo has made a firm cash offer valuing easyJet’s issued and to-be-issued share capital at approximately £5.7 billion.

The acquisition would be made through Eagle Bidco, a company indirectly owned by funds managed by Apollo. Under its principal offer, easyJet shareholders would receive £7.15 in cash for every share they hold.

That represents an 81% premium to easyJet’s closing share price of £3.94 on 28 May, the final trading day before Castlelake’s interest in the airline became public. It is also 25p per share above Castlelake’s latest proposal of £6.90.

The easyJet board has unanimously recommended Apollo’s cash offer, describing it as providing immediate and certain value while recognising the quality of the airline and its future prospects.

Apollo has also secured support from the Haji-Ioannou family concert party, which includes easyJet founder Sir Stelios Haji-Ioannou. The family has given an irrevocable undertaking to support the transaction in respect of approximately 15.31% of easyJet’s issued share capital. easyJet directors holding shares have also agreed to vote in favour.

Eligible shareholders will have an alternative to receiving cash. They may elect to exchange their entire holding for unlisted shares in Apollo’s new parent company on a one-for-one basis.

However, the number of rollover shares is capped at 49.9% of the new parent company. Elections could therefore be scaled back, with the remainder paid in cash. The shares would not be publicly traded and could be more difficult to sell or value than existing easyJet shares.

The easyJet board is recommending the cash offer but has not made a recommendation on the rollover alternative, saying its advantages and disadvantages will depend on individual shareholders’ circumstances.

Castlelake walks away from easyJet deal

Apollo’s firm offer was announced as Castlelake confirmed it no longer intended to make an offer for easyJet.

Castlelake had been pursuing the airline since May and submitted a series of increasingly valuable proposals. Its fifth and final public proposal offered £6.90 per share, and easyJet’s board initially said it would be minded to recommend a firm offer at that level.

That position changed after Apollo proposed £7.15 per share. easyJet continued providing due diligence access to both companies, but Castlelake ultimately decided not to proceed.

Castlelake said it appreciated the “constructive engagement” with easyJet’s board and management and thanked them for considering the potential transaction.

Its withdrawal is a Rule 2.8 statement under the City Code on Takeovers and Mergers, which would normally restrict Castlelake from returning with another proposal.

There is, however, a wrinkle. Castlelake has reserved the right to set those restrictions aside if a third party, expressly including Apollo, announces a firm offer. Apollo has now done precisely that.

Castlelake has therefore walked away for now, but its announcement leaves open a technical route for it to re-enter the process. There is currently no indication that it intends to do so.

What happens next?

Apollo and easyJet intend to complete the acquisition through a court-approved scheme of arrangement.

The next major step will be the publication of a detailed scheme document, expected within 28 days of the firm-offer announcement unless the Takeover Panel agrees to a later date.

That document will contain the full transaction terms, voting instructions, the timetable for shareholder meetings and further information about the rollover alternative.

Shareholders will then vote at two meetings.

At the Court Meeting, the scheme must be supported by a majority in number of voting shareholders, representing at least 75% of the value of shares voted. A separate resolution must also receive at least 75% of votes cast at easyJet’s General Meeting.

The deal also requires aviation, foreign investment and competition approvals across several jurisdictions. These include merger control clearances in Austria, Egypt, Germany and the UK, alongside foreign investment approvals in countries including France, Italy, Malta and Spain.

Once those conditions have been met, the High Court must sanction the scheme. The court order would then be delivered to the Registrar of Companies, making the transaction effective.

Apollo and easyJet currently expect the acquisition to complete by the end of the first quarter of 2027.

What does the Apollo deal mean for easyJet shareholders?

Shareholders who do not choose, or are not eligible for, the rollover alternative would receive £7.15 per share in cash when the acquisition becomes effective.

Once approved, the scheme would bind all affected shareholders, including those who did not vote or who voted against it. The cash consideration is expected to be distributed within 14 days of the effective date.

easyJet’s shares would then be removed from the London Stock Exchange and the company would be re-registered as a private limited company. Existing public shareholders would no longer be able to trade easyJet shares unless they had elected for the unlisted rollover alternative.

What does an Apollo takeover mean for easyJet passengers?

For passengers, there should be no immediate change. easyJet remains a publicly listed airline until the transaction completes, and the takeover process does not alter existing bookings, flight schedules or passenger rights.

Apollo has said it supports easyJet’s existing strategy and intends to preserve what it describes as the airline’s core low-cost identity and fares.

Over the longer term, Apollo has identified opportunities to develop easyJet’s revenue management, ancillary products, loyalty programme and network. It has also raised the possibility of adding more premium or business-focused features, growing easyJet holidays and exploring further airline partnerships, including interlining and codesharing.

Those plans could eventually influence the products, routes and fares offered to passengers, but they remain broad ambitions rather than confirmed operational changes.

The EU is currently reviewing its ownership rules for airlines, which could prove a sticking point for the deal in the future.

No date has been set for the shareholder vote, but things are likely to move quickly from here.