Another U.S.-based investment firm is making a play to acquire British low-cost airline EasyJet.
The carrier announced Friday that it has reached an “agreement in principle” with Apollo Global Management, which submitted a takeover offer of £7.15 per share in cash last week. That proposal beats an earlier bid from alternative investment manager Castlelake, which valued the airline at £6.90 per share.
EasyJet reached a similar agreement in principle with Castlelake on July 5, but it now appears that deal is off. The carrier’s board said Friday that it is “no longer minded to recommend the Castlelake proposal.”
Castlelake’s offer was not legally binding or conclusive – the company would have had until Aug. 3 to extend a final, firm bid. Similarly, Apollo will have until Aug. 7 to confirm its own offer.
“This is still just a possible offer, and there is no certainty that any firm offer will be made,” EasyJet advised. “Apollo has not officially committed to a final, binding bid yet, and there is no guarantee that a final deal will actually happen.”
Under the British law governing corporate acquisitions, companies have a defined period of time to extend proposals, make a deal, or walk away.
Perhaps anticipating some concern from customers, EasyJet said in a statement that it will continue to operate as normal if it is ultimately acquired by Apollo.
“Apollo attaches great importance to the strength of the EasyJet brand and intends that it will remain in use following the completion of the transaction,” the carrier said. “Apollo plans to keep the current brand license agreement between EasyJet and EasyGroup Ltd in place without any changes.”
Castlelake announced its interest in EasyJet last month, after the oil shock stemming from the war in Iran depressed the airline’s stock price. The carrier’s board rejected several early offers, insisting it had no interest in a sale, but said it would recommend Castlelake’s fifth proposal, which it considered a fair valuation.
