Apollo Gatecrashes Castlelake's £5.5bn easyJet Deal With Higher Bid

Apollo has moved to gatecrash a takeover of easyJet just days after rival investor Castlelake secured the outline of its own deal, unveiling a £5.7 billion offer on Friday with the backing of the airline's board.

The US investment firm, which manages roughly $1 trillion in assets, had reportedly been quietly preparing its own approach for months, holding talks with easyJet's board even as Castlelake worked to finalise terms. Once Castlelake reached an agreement over the weekend, Apollo moved within days to top it, offering a price nearly 4 per cent higher than its rival's.

A rivalry decades in the making

Apollo and Castlelake are longtime competitors in aviation financing and broader private capital markets, and Apollo's timing suggests a deliberate strategy: allowing Castlelake to establish the highest price it could secure before stepping in to beat it. The move caught markets off guard, though industry participants close to the process said a rival bid had long seemed inevitable given easyJet's perceived undervaluation.

Apollo's statement framed the approach as the product of years of interest in the airline, describing easyJet as one of the most attractive businesses in the global aviation sector. The firm's broader aviation portfolio includes stakes in Aeromexico, Sun Country Airlines and cargo carrier Atlas Air, along with financing arrangements with Air France-KLM and Virgin Atlantic.

Castlelake, though considerably smaller than Apollo, brings its own deep aviation expertise, built over decades of financing aircraft leases and holding stakes in carriers around the world, including a roughly one-third ownership position in Scandinavia's SAS. That specialist background is part of why its initial approach to easyJet was taken seriously despite the eventual outbid; the firm was widely seen as a credible, patient buyer rather than an opportunistic outsider.

A carrier weakened before the bidding began

The takeover interest emerged against the backdrop of a difficult year for easyJet. Conflict between the US and Iran pushed jet fuel prices sharply higher and disrupted travel plans earlier in the year, wiping out more than a third of the airline's share value before Castlelake's approach became public. The financial toll showed up clearly in easyJet's results: in May, the airline reported a headline post-tax loss of £377 million for the six months to the end of March, 27 per cent deeper than the same period a year earlier, even as revenue grew 12 per cent to nearly £4 billion. Management had also warned that higher fuel costs and weaker booking visibility would continue to weigh on the second half of the financial year.

That backdrop explains both the scale of the eventual premium on offer and why investors, despite welcoming the bidding contest, have been cautious about pricing shares fully up to either offer. Apollo's £7.15-a-share bid represents an 81 per cent premium to the £3.94 level at which easyJet closed on 28 May, which was the last trading day before news of Castlelake's interest broke.¹

Shareholders welcome competition, but want more

Investors reacted positively to the emergence of a second bidder, with easyJet shares climbing around 15 per cent to their highest level since early 2022, though still trading below Apollo's offer price. Several top shareholders have argued the airline's underlying value still exceeds what either bidder has offered so far, having previously held out for a price above £7 a share.

“

A network of highly attractive and difficult-to-replicate airport slots and hubs.

Iván Martín, chief executive, Magallanes Value Investors, describing easyJet's assets.²

Ownership rules complicate both offers

A key complication for both bidders is a long-standing rule requiring European airlines to remain majority-owned by EU or UK nationals in order to keep their flying rights. Castlelake had proposed satisfying that requirement by partnering with two Irish aviation executives, Peter Bellew and Mark Breen, who would hold a controlling stake through an EU-based vehicle.³ Apollo, for its part, has said it will take all necessary steps to secure merger clearance and any approvals required under the EU's Foreign Subsidies Regulation, though it has not yet detailed how it intends to satisfy the ownership rule itself.

Concern over these regulatory hurdles helps explain why easyJet's share price has continued to lag both bid prices, even as the contest between Apollo and Castlelake has intensified.

The kingmaker: easyJet's founder

Central to either bidder's chances is winning over Sir Stelios Haji-Ioannou, easyJet's founder, who, together with his family, owns roughly 15 per cent of the airline and collects a royalty on its revenue through his easyGroup vehicle. He has engaged with both firms but not publicly backed either. People close to the matter said preserving that royalty arrangement has been a key point of discussion, and Apollo has pledged to retain the easyJet brand by extending the existing licence with easyGroup.

How the contest reached this point

Castlelake's interest in easyJet became public in late May, and the airline initially rebuffed the US investor's early approaches. That changed on 25 June, when easyJet's board opened the door to formal talks, eventually accepting Castlelake's fifth successively improved proposal over the weekend. Apollo's intervention came just three days later, and easyJet's board has since said the new offer delivers a "superior outcome" for shareholders, adding that it is "no longer minded to recommend" Castlelake's proposal.⁴

Under British takeover rules, Castlelake now has until 3 August to either table an improved bid or walk away, while Apollo faces its own deadline of 7 August to make a firm offer. Both firms have signalled they intend to keep easyJet's current management and strategy largely intact, including its fast-growing holidays division, rather than break the airline apart, with a future sale to a larger European carrier or a public listing seen as possible longer-term outcomes once either deal completes.

Part of a wider pattern

A completed deal, under either bidder, would mark another departure from the London Stock Exchange, adding easyJet to a growing list of UK-listed companies taken private by foreign buyers or drawn toward capital raised outside British public markets. That trend has become a recurring talking point among London-listed company boards and policymakers alike, as concerns persist about the depth, valuation levels, and long-term attractiveness of UK equities relative to US and private capital alternatives.

It also underscores how far private equity's ambitions in aviation have grown. Airlines have historically been seen as capital-intensive, cyclical, and difficult to finance profitably, but persistently low valuations across UK-listed carriers, combined with the sector's essential, hard-to-replicate infrastructure (landing slots, airport gates, brand loyalty), have made names like easyJet increasingly attractive to buyout firms hunting for durable, differentiated assets at a discount.

What happens next

For now, the outcome rests on a straightforward question, as one person close to the deal put it: which firm is willing to pay the most?

Footnotes

1. Euronews, Apollo hijacks easyJet takeover with £5.7bn bid, trumping Castlelake↗ (opens in a new tab), 10 July 2026. ↩

2. Financial Times, 'It's all about the number': how Apollo gazumped Castlelake's easyJet bid↗ (opens in a new tab), 10 July 2026. ↩

3. FlightGlobal, Castlelake links former EasyJet figure Bellew with proposed EU entity to meet ownership criteria for takeover↗ (opens in a new tab), 22 June 2026. ↩

4. CBS News, EasyJet accepts takeover offer from private equity firm Apollo amid apparent bidding war with Castlerock↗ (opens in a new tab), 10 July 2026. ↩