British carrier EasyJet has agreed to be acquired by U.S. asset manager Apollo in a deal that would take the airline private for about $7.7 billion.
EasyJet’s directors said Thursday that they will formally recommend shareholders vote in favor of the buyout, which would entitle each investor to £7.15 in cash per share. The value represents a “significant premium” on the carrier’s current stock price, they added.
“The EasyJet board has carefully evaluated the proposal from Apollo alongside EasyJet’s standalone prospects,” Non-Executive Chairman Stephen Hester said in a news release. “While we remain confident in the strength of our business and the opportunities ahead, we believe this offer appropriately recognises the quality of the business we have built and delivers immediate, certain, and attractive value for shareholders.”
The airline’s leaders also said Apollo is highly supportive of their existing management strategy and believes there is meaningful potential for long-term growth. With a new infusion of capital, they said, Apollo will look to optimize EasyJet’s loyalty program and network, improve revenue management, and pursue new partnership and distribution opportunities.
The announcement came the same day alternative investment firm Castlelake formally withdrew from the bidding process. The company made several offers for EasyJet earlier this summer and appeared to be moving toward a deal until Apollo began its pursuit last month.
Castlelake did not give a reason for dropping its bid.
EasyJet initially insisted that it had no interest in any acquisition, but softened its position as Castlelake gradually increased its offers through June and July. The highest Castlelake offer valued EasyJet at around $7.3 billion.
To comply with EU ownership regulations, the family of EasyJet founder Stelios Haji-Ioannou and other large shareholders will retain between 45% and 49% of the carrier. An EU trust will hold up to 5%.
Apollo currently owns stakes in Sun Country, Aeroméxico, and Atlas Air.
