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Apollo Global Management just crashed Castlelake’s party. The private equity titan lobbed a £5.7 billion (roughly $7.65 billion) all-cash takeover bid for budget airline easyJet, offering £7.15 per share and leapfrogging Castlelake’s competing offer of £6.90 per share that the easyJet board had backed just days earlier.
The easyJet board, which had been “minded to recommend” Castlelake’s proposal earlier in the week, has now pivoted to favor Apollo’s superior bid. EasyJet shares surged between 13% and 15% on the announcement, hitting price levels not seen since early 2022.
The bidding war heats up
Apollo’s bid includes a notable sweetener: existing shareholders, including the founder’s family, would have the option to maintain a stake in the company rather than being forced to cash out entirely.
Apollo manages over $1 trillion in assets, making it one of the largest alternative asset managers on the planet. Castlelake, while well-established in aviation finance, operates at a considerably smaller scale.
Why private equity wants airlines now
The post-pandemic aviation recovery has been one of the more compelling macro stories in traditional finance over the past few years. Airlines that survived the 2020-2021 demand collapse have largely rebuilt their operations, and budget carriers like easyJet have benefited from consumers trading down from legacy airlines as inflation squeezed household budgets.
For traditional equity investors watching the easyJet saga, the immediate question is whether a counter-bid from Castlelake or a third party might push the price even higher. The 13-15% single-day share price jump suggests the market is pricing in at least some probability of further escalation. EasyJet shares reaching their highest levels since early 2022 also sets a new psychological floor that any competing bidder would need to exceed.
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