Investing.com — EasyJet stock surged +13.2% to reach 666p today after the Luton-based budget carrier announced it had agreed in principle to a £5.7 billion takeover proposal from Apollo Global Management, valuing each share at £7.15 in cash.
EasyJet stated it was “no longer minded to recommend the Castlelake proposal” just days after having accepted Castlelake’s £6.90-per-share bid in principle, marking a dramatic twist in the airline’s ongoing takeover saga.
EasyJet described the Apollo offer as delivering “a superior outcome for easyJet shareholders by providing a higher cash value than Castlelake’s latest proposal of £6.90 per easyJet share.”
Apollo’s proposal is approximately 3.6% higher than Castlelake’s latest bid and could mark the start of a full takeover battle for the London-listed carrier. EasyJet noted that the Apollo offer represents an 81% premium to its share price of £3.94 on May 28, the last trading day before Castlelake’s interest was made public.
The latest agreement in principle does not constitute a confirmed deal — Apollo has been given a deadline of 17:00 on August 7 to either make a firm bid or walk away.
The bid arrives as the global aviation sector remains under pressure, with jet fuel supplies squeezed in the wake of the U.S.-Iran conflict, and the International Air Transport Association having warned that global airline profitability was expected to halve this year as the industry’s fuel bills surge.
Against that backdrop, the broader UK market provided a modestly supportive backdrop, with the FTSE 100 rising on Friday as diplomatic efforts between Washington and Tehran eased Middle East conflict concerns, while Germany’s DAX and France’s CAC 40 also edged higher.
The combination of a higher competing bid, a board-endorsed recommendation shift, and a softening geopolitical backdrop converged to push EasyJet shares to their highest level in over a year. With both Apollo and Castlelake still in the running and firm-offer deadlines set for early August, the market is now pricing in the elevated probability of a successfully completed deal — and potentially further upward pressure on the offer price should the bidding war escalate.
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Source:
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