EasyJet has announced it has reached an agreement in principle with the American investment fund Apollo for a potential takeover of the British airline. This new proposal values the company at £5,7 billion, or approximately €6,7 billion, and surpasses the competing offer from Castlelake.
Apollo is offering £7,15 per share, compared to £6,90 in Castlelake's latest offer. EasyJet's board believes this proposal offers better value to shareholders and has indicated that it no longer wishes to recommend the competing offer. However, a formal recommendation will be conditional upon the submission of a firm offer before August 7.
Support for EasyJet's development strategy
According to the British group, Apollo supports the company's current strategy, which is based on strengthening its low-cost carrier model. The fund intends, in particular, to support the increase in fleet capacity, the development of revenue from ancillary services, and the growth of EasyJet Holidays, which has become a major diversification strategy.
The board of directors believes that this proposal presents a favorable balance between financial valuation, strategic vision and long-term development.
Castlelake now out of the running
EasyJet announced on July 5th an initial agreement in principle with Castlelake, after rejecting several proposals deemed insufficient. The airline argued, in particular, that the initial offers had been made while its share price was weakened by the impact of the conflict in the Middle East on the airline sector.
The group had nevertheless agreed to open its accounts in Castlelake to facilitate an improved offer. With Apollo's arrival and a superior financial proposal, the competition for control of EasyJet has now taken on a new dimension.
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