Apollo easyJet bid lifts airline sale fight to GBP5.7bn

Apollo's move for easyJet has turned a live airline sale into a more serious bidding contest, with the US private-equity group reported to have offered GBP7.15 a share in cash. That values the low-cost carrier at about GBP5.7bn and puts it ahead of Castlelake's earlier GBP6.90-a-share proposal.

For easyJet shareholders, the immediate question is simple: is the new price enough? For the wider UK market, the question is harder. A successful deal would remove another familiar London-listed company from public markets at a time when private capital has been hunting assets that still look cheap compared with their pre-pandemic standing.

The higher proposal also changes the board's room for manoeuvre. A board that was prepared to engage with one private-equity offer now has to judge whether a better price, a different ownership plan and the bidder's aviation experience make Apollo the stronger route.

EasyJet is not a distressed carrier. It has a recognised brand, valuable airport positions, a growing holidays arm and a fleet plan that investors can understand. But it remains exposed to fuel costs, consumer confidence, European regulation and the seasonal nature of leisure travel. Those risks are exactly why bidders may argue public markets have undervalued the company.

Apollo's approach is also likely to raise questions about what happens after a delisting. Private ownership can give management more time to invest without quarterly market pressure. It can also increase debt and reduce transparency, which matters when a transport brand is central to holiday routes, regional airports and family travel budgets.

The easyGroup founder Stelios Haji-Ioannou remains an important figure because his family's stake is large enough to matter in any shareholder vote. If the deal proceeds, the future of the easyJet brand licensing arrangement will be watched closely.

Regulators will also have a say. The airline industry is sensitive to foreign ownership, competition and consumer protection rules, especially in Europe. Any buyer has to show that the transaction can work within those limits.

For now, the market signal is clear enough: the airline has become more valuable in a sale process than it looked before the offers arrived. That does not mean shareholders should accept the first improved number. It does mean easyJet is now firmly in play.