EasyJet Gets Surprise Apollo Offer That Beats Castlelake Bid
(Bloomberg) -- EasyJet Plc received a fresh offer from private equity firm Apollo Global Management for 715 pence a share that beats a rival proposal from Castlelake, a surprise twist in the takeover battle for the UK budget carrier that sets up a possible competition between the two US investment funds.
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Given that Apollo's £5.7 billion ($7.7 billion) bid is superior, EasyJet is "no longer minded to recommend the Castlelake proposal," according to a statement on Friday. With regards to Apollo's bid, "the financial terms of the proposed cash offer are at a level that it would be minded to recommend to EasyJet shareholders," it said.
The sudden arrival of Apollo as an interloper follows multiple rounds between EasyJet and Castlelake, which had continuously raised its bid to get talks going. EasyJet's board finally gave in when an offer reached 650 pence, opening its books to Castlelake and granting the investor more time to weigh its next steps.
Castlelake's latest proposal over the weekend then reached 690 pence a share.
"EasyJet management's operational and commercial ambitions can be substantially accelerated via the access to incremental capital and longer-term business and strategic planning that a private company setting affords," Apollo said.
Apollo said that shareholders in the airline will have the option to roll their existing stock into a so-called stub equity alternative through which the Apollo funds would hold their investment in the airline.
Apollo also said that it would seek to satisfy the necessary condition for overseas investors to control a European airline. Regulation requires carriers to be majority owned by a European entity, a hurdle that Castlelake had sought to overcome by bringing on board two Irish airline executives.
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