British low-cost airline EasyJet confirmed its takeover by US investment firm Apollo for £5.7 billion on Thursday. The value of the deal is about $7.7 billion. The acquisition was confirmed after a rival American company withdrew from EasyJet's bidding process.
"The boards of directors... are pleased to announce that they have reached an agreement on the terms and conditions of a proposed cash acquisition," EasyJet, which operates flights mainly across Europe, said in a statement.
Earlier on Thursday, U.S. investment group Castlelake said it had no intention of making a higher bid for the airline, having proposed to acquire it for just over £5 billion.
Under UK takeover rules, the two companies had until Friday to submit revised bids.
"Castlelake confirms that, after careful consideration, it does not intend to submit an (improved) offer for EasyJet," the American group said in a statement on Thursday.
EasyJet had reported last month that Apollo's informal offer, also worth £5.7 billion, ensured a "better outcome" for shareholders compared to Castlelake's proposal.
Apollo, which manages more than $1 trillion worth of assets worldwide, is not a newcomer to the aviation sector, having invested in Aeromexico, Sun Country Airlines and Atlas Air — and provided financing to Air France-KLM and Virgin Atlantic.
As a foreign company, it cannot acquire full ownership of the airline, due to UK and European Union rules that require companies to be majority owned and controlled by local nationals.
The position of Stelios Hatziioannou
Sir Stelios Hadjiioannou announced his decision to support the acquisition of easyJet by Apollo.
The announcement is as follows
"After careful consideration of Apollo's proposal, my family and I have decided to support the proposed acquisition, as announced by easyJet's Board of Directors. At the same time, we will remain shareholders in the private company that will emerge after easyJet's exit from the London Stock Exchange.
The starting point for the creation of the easy family of brands began in 1994, when, at the age of 27, I started easyJet, the first of the brands in the easy family. In 2000 I listed easyJet plc on the London Stock Exchange in order to secure funding for the expansion of the company's fleet, which from 19 aircraft at the time now numbers about 356. At the same time, I made the strategic decision to retain ownership of the easyJet brand through my private company, easyGroup Ltd. Ownership of the easy family of brands has created a steady stream of revenue for me over the last 26 years, which I can now use to finance the charitable work of the Stelios Hadjiioannou Charitable Foundation.
I welcome Apollo's strategic intentions for easyJet, which aim to create new growth prospects for the company. The fact that Apollo, one of the most powerful and experienced institutional investors in the world, has decided to support and invest in the development of easyJet, the leading member of the easy family of brands, is a strong confirmation of the value of the easy brand and the dynamics of easyGroup Ltd's business model.
My family and I intend to maintain our position as important long-term shareholders of easyJet, supporting the next chapter of the company's journey."
