easyJet plc (LON: EZJ) has reached agreement in principle with Apollo on the key financial terms of a possible cash offer valuing the airline at approximately £5.7 billion. Under the proposal, easyJet shareholders would receive £7.15 in cash for each share.
The potential offer represents an 81% premium to easyJet’s closing share price of £3.94 on 28 May 2026, the final business day before the start of the offer period relating to Castlelake’s earlier approach.
It also represents a 22% premium to easyJet’s highest share price during the four years prior to 28 May 2026 and an 80% premium to the airline’s 90-day volume-weighted average share price of £3.97.
Apollo is also proposing a Stub Equity Alternative that would allow eligible easyJet shareholders to roll their existing holdings into the investment vehicle through which Apollo Funds would own the airline.
The precise terms of that equity alternative, including voting rights, remain subject to further discussion and agreement.
The easyJet board said it had carefully considered Apollo’s proposal and unanimously concluded that the £7.15 cash offer was at a level it would be minded to recommend to shareholders if Apollo announces a firm offer on those financial terms and satisfactory agreement is reached on all other conditions and definitive transaction documentation.
The Apollo proposal is higher than Castlelake’s latest offer of £6.90 per share, submitted on 4 July 2026. As a result, easyJet said its board is no longer minded to recommend the Castlelake proposal.
Apollo said it has followed easyJet for many years and considers the airline one of the most attractive businesses in the global aviation sector. The investment group said it supports easyJet’s existing strategy, including increasing fleet capacity through larger aircraft, expanding ancillary and loyalty revenues and growing easyJet Holidays into a more significant earnings stream.
Apollo believes these ambitions could be accelerated through greater access to capital and the longer-term strategic planning available under private ownership.
The proposed cash offer is expected to be financed through a combination of committed equity and debt facilities. The equity funding would come from Apollo Funds, while Barclays has indicated that it is highly confident of arranging the required debt financing.
Apollo also said it intends to retain the easyJet brand and does not plan to make changes to the existing brand licence agreement with easyGroup Ltd, the investment vehicle of easyJet founder Sir Stelios Haji-Ioannou.
The company also emphasised the importance of easyJet’s management and workforce and said retaining key employees would be a priority following any transaction.
However, the announcement does not constitute a firm intention to make an offer under Rule 2.7 of the UK Takeover Code.
There can be no certainty that a formal offer will ultimately be made, and easyJet shareholders have been advised to take no action at this stage.
