Castlelake Drops Bid as Apollo Offers $7.7 Billion for easy Jet
U.S. private-equity firm Castlelake has withdrawn its bid for the British low-cost airline easyJet, clearing the way for rival Apollo Global Management to acquire the company. easyJet shares rose about 3.1% in afternoon trading in London after the news. Apollo plans to take easyJet private in a transaction that values the airline at about $7.7 billion. The deal is expected to close by the end of the first quarter next year. Castlelake said in a statement to the London Stock Exchange that, after careful consideration, it had decided not to make an offer for easyJet. The announcement initially sent easyJet shares down more than 6%, before they rebounded from their low. Under the terms of Apollo's deal, easyJet shareholders will receive £7.15 per share, equivalent to $9.63. Compared with the Feb. 27 closing price, the last trading day before the outbreak of the current Middle East conflict, the offer represents a 54% premium. Last month, easyJet said it was minded in principle to accept Castlelake's $7.3 billion offer. Just days later, Apollo entered the bidding with a higher proposal. Castlelake's offer was itself an improved version of its bid: Its initial $6.64 billion proposal, made in June, was rejected by easyJet. Had it gone ahead, the deal would have reshaped Europe's airline industry. Expectations of a private-equity takeover have continued to lift easyJet's share price. Through Wednesday's close in London, the stock had gained nearly 50% cumulatively. The 31-year-old airline has been viewed by private-equity firms as an attractive takeover target because it holds scarce takeoff and landing slots at major European hub airports, including London Gatwick, Paris and Geneva. Castlelake is a major source of financing for the aviation industry and provides aircraft-leasing services to about 200 airlines. EasyJet Chief Executive Kenton Jarvis said: "We welcome Apollo's commitment to our business and all our employees. Apollo has extensive experience in the aviation industry and is a strong partner for easyJet as we accelerate our growth plans and continue to provide passengers with affordable, high-value travel services." Alex van Hoek, an Apollo partner and head of its European private-equity business, added: "easyJet is a leading company in the European aviation sector. Through its high-quality passenger service, extensive route network and strong brand, it has built a distinctive market advantage. "Apollo fully supports easyJet's continued efforts to expand connectivity across Europe and the United Kingdom, and recognizes the key role all employees play in serving passengers. "We are honored to have earned this trust and to lead efforts to help easyJet enter a new phase of growth while continuing to contribute to the development of the aviation industry in the United Kingdom and Europe."
Apollo plans to take easyJet private in a transaction that values the airline at about $7.7 billion. The deal is expected to close by the end of the first quarter next year.
Castlelake said in a statement to the London Stock Exchange that, after careful consideration, it had decided not to make an offer for easyJet. The announcement initially sent easyJet shares down more than 6%, before they rebounded from their low.
Under the terms of Apollo's deal, easyJet shareholders will receive £7.15 per share, equivalent to $9.63. Compared with the Feb. 27 closing price, the last trading day before the outbreak of the current Middle East conflict, the offer represents a 54% premium.
Last month, easyJet said it was minded in principle to accept Castlelake's $7.3 billion offer. Just days later, Apollo entered the bidding with a higher proposal. Castlelake's offer was itself an improved version of its bid: Its initial $6.64 billion proposal, made in June, was rejected by easyJet. Had it gone ahead, the deal would have reshaped Europe's airline industry.
Expectations of a private-equity takeover have continued to lift easyJet's share price. Through Wednesday's close in London, the stock had gained nearly 50% cumulatively.
The 31-year-old airline has been viewed by private-equity firms as an attractive takeover target because it holds scarce takeoff and landing slots at major European hub airports, including London Gatwick, Paris and Geneva.
Castlelake is a major source of financing for the aviation industry and provides aircraft-leasing services to about 200 airlines.
EasyJet Chief Executive Kenton Jarvis said: "We welcome Apollo's commitment to our business and all our employees. Apollo has extensive experience in the aviation industry and is a strong partner for easyJet as we accelerate our growth plans and continue to provide passengers with affordable, high-value travel services."
Alex van Hoek, an Apollo partner and head of its European private-equity business, added: "easyJet is a leading company in the European aviation sector. Through its high-quality passenger service, extensive route network and strong brand, it has built a distinctive market advantage.
"Apollo fully supports easyJet's continued efforts to expand connectivity across Europe and the United Kingdom, and recognizes the key role all employees play in serving passengers.
"We are honored to have earned this trust and to lead efforts to help easyJet enter a new phase of growth while continuing to contribute to the development of the aviation industry in the United Kingdom and Europe."