London (AFP) – Britain’s no-frills airline EasyJet confirmed Thursday a £5.7-billion ($7.7-billion) takeover by US private equity firm Apollo after a rival American firm pulled out of the bidding. “The boards are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash acquisition,” EasyJet, which flies mainly across Europe, said in a statement. The deal is expected to complete by the end of next year’s first quarter, it added. EasyJet’s headquarters will remain in the town of Luton, known for its airport close to London.
Earlier Thursday, US investment group Castlelake said it did not intend to make a higher offer for the carrier, having proposed to buy the airline for a little over £5 billion. Under UK takeover rules, the two firms had until Friday to table revised bids. “Castlelake confirms that, following careful consideration, it does not intend to make an (improved) offer for EasyJet,” the US group said in a statement Thursday.
– ‘Strong partner’ – EasyJet last month said that Apollo’s informal bid, valued also at £5.7 billion, delivered a “superior outcome” for shareholders compared to the Castlelake proposal. EasyJet chief executive Kenton Jarvis on Thursday said Apollo’s “experience in the aviation sector makes it a strong partner.” The US firm manages more than $1 trillion in assets worldwide, while investing in Aeromexico, Sun Country Airlines, and Atlas Air. It has provided financing also to Air France-KLM and Virgin Atlantic.
Alex van Hoek, partner and European private equity lead at Apollo, said the company is “proud to be trusted to play a lead role supporting the EasyJet Group in this next phase of its growth and furthering its important contribution to the European and UK aviation sectors.” As a foreign entity, however, Apollo is unable to take full ownership of the airline outright owing to UK and European rules requiring firms to be majority owned and controlled by regional nationals. However, the US firm had confirmed it would take necessary steps to find a European partner.
The offer price is £7.15 per EasyJet share, which was trading at £6.73 following Thursday’s takeover confirmation. EasyJet recently said its net profits had plunged in the third quarter as the Middle East war sent jet fuel prices soaring. Profit before tax slumped 70 percent to £85 million in the April-June period compared to one year earlier.
EasyJet was founded by entrepreneur Stelios Haji-Ioannou in the 1990s as Europe’s budget airline sector took off. Irish airline Ryanair is Europe’s biggest carrier by passenger numbers.
© 2024 AFP
