EasyJet shares surged Friday after the British budget airline said it is considering a higher takeover proposal from Apollo Global Management valued at about $7.7 billion, replacing its earlier support for a rival bid from Castlelake.
The announcement comes as airlines continue to face higher operating costs as a result of the conflict between the U.S. and Iran, which has pushed up jet fuel prices and added pressure across the aviation industry.
The London-listed carrier said Apollo's proposed all-cash offer values the company at $7.66 billion, representing a roughly 22% premium to Thursday's closing price. Shareholders would also have the option to exchange their holdings for equity in the acquisition vehicle that Apollo plans to use, allowing them to retain voting rights if they choose. The detailed terms of that alternative remain under discussion, CNBC reported.
EasyJet shares climbed as much as 14% after markets opened before trading about 13.2% higher later in the session. The stock had closed Thursday at $7.89 and has gained more than 15% since the start of the year.
The higher bid has shifted the airline's position only days after it reached an agreement in principle to support a takeover proposal from Castlelake. EasyJet said Apollo's offer provides shareholders with a superior cash outcome while also delivering what its board described as an attractive combination of value, strategic alignment and long-term stewardship of the business. As a result, the board said it is no longer minded to recommend Castlelake's proposal, according to Reuters.
Castlelake's latest proposal values easyJet at $9.26 per share in cash. The investment firm has until Aug. 3 to either submit a firm offer or withdraw from the process, while Apollo faces a separate regulatory deadline to formalize its proposal. Apollo's offer also represents an 81% premium to easyJet's closing share price on May 28, the final trading day before the takeover process began.
Apollo's proposal includes commitments aimed at preserving the airline's existing business. The private equity firm said it would support easyJet's current strategy and management team and maintain the airline's licensing arrangements, while also offering existing shareholders the opportunity to remain invested through its stub equity structure, The Guardian reported.
The takeover battle comes at a difficult time for the airline industry. Last month, the International Air Transport Association (IATA) cut its 2026 global airline profit outlook, saying conflict in the Middle East had driven fuel costs higher, disrupted key flight corridors and significantly increased industry expenses, Reuters reported.
EasyJet has also acknowledged those pressures in its own financial results. The airline recently reported a first-half pre-tax loss of $741 million, compared with a $529 million loss a year earlier. The company said the conflict in the Middle East had increased fuel costs while reducing forward booking visibility, weighing on its second-half performance.
Despite those challenges, analysts said Apollo's proposal supports easyJet's long-term strategy. Bernstein analysts noted Friday that private ownership under Apollo would likely allow the airline to continue pursuing its existing growth plans, although they also said the valuation would require substantial cost improvements to justify the purchase price.
