$7.7 billion offer exceeds Castlelake's! Apollo enters the bidding for EasyJet Airlines (ESYJY.US), two major American private equity firms may start a bidding war.

EasyJet Airlines (ESYJY.US) has received a new acquisition offer of 715 pence per share from the American private equity firm Apollo Global Management Inc (APO.US), which is higher than the offer from Castlelake. This unexpected turn of events has brought a new variable to this British low-cost airline acquisition battle, signaling a potential competition between the two American private equity firms. Given that Apollo's 5.7 billion (approximately $7.7 billion) offer is more advantageous, EasyJet Airlines stated in a Friday declaration that they "no longer recommend shareholders accept Castlelake's acquisition proposal." The statement also mentioned that, regarding Apollo's acquisition proposal, the "proposed cash acquisition terms are at a level that is worth recommending to EasyJet shareholders." Previously, EasyJet Airlines and Castlelake engaged in multiple rounds of negotiations, with the latter continuously increasing their offer to facilitate the deal. It was reported that on July 5, EasyJet Airlines announced that they had "principally" agreed to the fifth acquisition offer from American Castlelake, which was priced at 6.90 per share, resulting in a total valuation of 5.2 billion (approximately $6.9 billion) for EasyJet Airlines, with a fully diluted valuation of around 5.5 billion ($7.34 billion), a premium of about 73% over the closing price before the disclosure of interest on May 29. If the deal goes through, this 31-year-old British low-cost airline, which went public in 2000, will be delisted, allowing the management to modernize the fleet, expand holiday operations, and restructure costs within the framework of private equity. For shareholders, this means locking in a premium exit amidst short-term macroeconomic shocks. EasyJet Airlines' most attractive assets include a fleet of modern Airbus A320 series aircraft; holding orders for hundreds of aircraft purchases, while also owning scarce peak landing slots at London, Milan, Geneva Hub Group, Inc. Class A airports. Apollo stated, "A privatization structure can provide EasyJet Airlines with incremental capital channels, while supporting the company to carry out longer-term business and strategic planning, thereby significantly accelerating the process of achieving various operational and commercial development goals by the management." Apollo mentioned that existing shareholders of the airline can choose to exchange their holdings for so-called retained equity; Apollo's various funds will hold investments in EasyJet Airlines through this retained equity structure. Apollo also expressed their commitment to meeting the necessary conditions for overseas investors to hold a controlling stake in European airlines. Regulatory requirements dictate that airlines must be controlled by European entities, and Castlelake had previously tried to overcome this obstacle by introducing two Irish airline executives. Founded in the 1990s, EasyJet Airlines is the second-largest low-cost carrier in Europe after Ryanair. Due to the surge in aviation fuel costs caused by Middle East conflicts, disrupting travel plans for the public, the company reported a 27% increase in losses to 377 million by the end of the half-year financial period ending in March.