EasyJet set for £5.7bn Apollo takeover after rival bidder walks away

Responding to the news that EasyJet is set for a £5.7billion takeover by Apollo, AJ Bell head of financial analysis Danni Hewson talks us through the developments.

She said: “It’s been a tough few months for airlines as the cost of jet fuel shot up and nerves about summer shortages impacted many people’s booking decisions.

“Having fewer bums on more expensive seats has created the kind of turbulence that private equity is always sensitive to, and as EasyJet’s share price dropped the European airline began to look like an increasingly tasty morsel.

“Cue not one, but two suitors entering the ring, with Castlelake unsuccessful after seemingly being gazumped following months of negotiations which almost got across the line.

“In the end it was Apollo that came up with the magic number of £7.15 per share. That’s a significant premium to where EasyJet’s shares were trading before the Iran war, but it’s a figure that’s still woefully short of the company’s pre-pandemic highs.

“Although there are no guarantees those halcyon days will return, with so many pressures on the airline. EasyJet is still recovering from those months when planes were grounded, despite the robust recovery as people rediscovered their love of travel and placed holidays firmly in the ‘required spending’ bracket.

“Whilst there are still significant hurdles for this deal to clear, not least European regulators with strict requirements for ownership of airlines, the potential loss of another well-known name from London markets will be seen as a blow.

“Air travel might not be as sexy as space travel, but retail investors understand it and names like EasyJet can’t easily be replaced.”