Everyone’s mad for easyJet: or so it would seem. While the deal with Castlelake initially appeared to be the only viable option, the airline’s board of directors has instead opted for the new bid from Apollo. The offer of £7.15 per share, for a deal worth £5.7 billion, effectively surpasses that of the US private equity Castlelake.
In any case this is a new chapter in the history of easyJet, Europe’s second-largest low-cost carrier, founded in 1995 by the Greek-Cypriot entrepreneur Stelios Haji-Ioannou, which carries around 90 million passengers a year. The offer from the American private equity giant (because yes, it is indeed a US-based firm) would allow current shareholders to reinvest their shares in the new company, enabling Haji-Ioannou (who owns just over 15%of the airline) to become a private shareholder. And, what's more Apollo (which has previously invested in airlines such as Aeromexico, Sun Country Airlines and the Atlas Air cargo group, and provided financing to KLM, Virgin Atlantic, SAS and LATAM) is said to be keen to support easyJet’s current growth strategy, centred on a fleet of larger, more fuel-efficient aircraft and on expanding its leisure travel business.
easyJet brings valuable assets to the table, including its own fleet of aircraft (over 210) and slots at major European airports. But, for the deal to be financially profitable, analysts see the need for significant restructuring (EBIT at least tripled by 2030) or an increase in value through the sale of assets. What is certain is that nothing is going to be straightforward: even the Apollo project will have to contend with strict European regulations which do not permit a continental airline to be controlled by foreign entities. Whish is why further European capital will be needed to secure the green light from Brussels. So all that remains is to wait and see how the situation develops, as it is bound to influence the fate of the "orange" airline.
Mariella Cattaneo
Journalist
