Board shifts recommendation as Apollo offers £7.15 per share
The easyJet board said Friday it has “carefully considered the proposed cash offer together with its financial advisers and has unanimously concluded that the financial terms of the proposed cash offer are at a level that it would be minded to recommend to easyJet shareholders,” according to a company statement.
“Accordingly, the easyJet board is no longer minded to recommend the Castlelake proposal,” the company said.
Apollo’s £7.15-per-share offer values the airline at approximately £5.7 billion, or about $7.7 billion. Analysts had said Castlelake’s £6.90-per-share offer undervalued easyJet at £5.5 billion. Castlelake had raised its bid five times before easyJet’s board agreed to it in principle earlier this week, as MSI previously reported.
Apollo said it would support easyJet’s current strategy and management team and was not looking to break up the company.
“Apollo believes in easyJet’s existing strategy of evolving and strengthening the low-cost carrier model, most notably through upgrading the fleet, enhancing the ancillary and loyalty offering, and scaling holidays into a structurally differentiated earnings stream,” the firm said in a statement.
The U.S. private equity firm said it “recognises the important contribution that easyJet’s management team, alongside easyJet’s employees, have made towards the company’s successes” and that “identifying and retaining key staff within the easyJet group will be of paramount importance.”
Apollo’s offer also includes a provision allowing current easyJet shareholders to retain their stakes under the new private ownership, rather than being forced to sell when the airline delists, according to the company.
The deal structure would take one of Europe’s largest low-cost carriers private amid a takeover battle that has unfolded over several weeks. Apollo now has until August 7 to make a firm, binding offer for the airline, under U.K. takeover rules.