EasyJet agrees to Apollo's 5.7 billion-pound takeover after Castlelake withdraws

EasyJet has agreed to Apollo Global Management's 5.7 billion-pound take-private deal after Castlelake withdrew from the contest, and the transaction is now being seen by some investors as a possible catalyst for further private equity interest in European budget airlines. Anna Macdonald, investment strategy director at Hargreaves Lansdown, said Jet2 could emerge as a potential target because it shares similar low-cost carrier characteristics with EasyJet and had been trading on a price-to-equity ratio of 6-7 times before rebounding roughly 60% from its low. She said U.K. equities, including airlines, remain "fertile hunting ground" for investors because valuations have lagged global peers. Apollo is expected to take EasyJet private in a deal valuing the airline at around $7.7 billion, after Castlelake withdrew its $7.3 billion bid. EasyJet's board has recommended Apollo's 7.15 pounds-a-share all-cash offer, which carries a 54% premium to the airline's Feb. 27 closing price and is backed by the Haji-Ioannou family through a rollover of its stake into a new holding company. Apollo's voting rights will be capped at 49.9%, with an EU Trust holding up to 5%, to satisfy U.K. and EU airline ownership rules. Subject to shareholder and regulatory approval, the scheme of arrangement is expected to complete in the first quarter of 2027. Macdonald said the deal underscores how private equity may see opportunity in a tough but cyclical industry where costs, demand and regulation can shift sharply. She added that private ownership could give airlines more flexibility over financing and capital intensity, though she said takeovers of international flag carriers appear less straightforward than buyouts in the budget airline segment. Jet2 declined to comment on market speculation, while its shares rose 0.5% in afternoon trade Friday. EasyJet shares were down 0.48% on Friday after closing the previous session 2.8% higher.