After agreeing to the offer at the beginning of the week: EasyJet is changing direction

“EasyJet’s board of directors carefully considered the proposed cash offer together with its financial advisors, and unanimously concluded that the financial terms of the proposed cash offer are at a level that it intended to recommend to shareholders,” the company said. “Accordingly, the EasyJet Board no longer wishes to recommend the Castle Lake proposal.”

As you may recall, Castle Lake’s offer was worth 6.9 pounds per share (as opposed to 7.15 in the current offer, an increase of 3.6%), so the entire transaction valued EasyJet at 5.23 billion pounds ($6.94 billion). This offer was the fifth offer of the American Investment Fund and although the company stated at the beginning of the week that this was an amount that the board of directors would be willing to recommend, it has now been reported that it is “no longer interested” in it.

Like Castle Lake, Apollo will also have to face regulatory difficulties. For example, since EasyJet is a European company, according to the rules of the Union, it will need at least 51% ownership from a European company. This means that the new buyer will have to find another partner.

The last word has not been said

And what is Apollo planning? The company broadcasts that it has no intention of disbanding EasyJet after the purchase. “Apollo believes in easyJet’s existing strategy to develop and strengthen the low-cost airline model, mainly through upgrading the fleet, improving ancillary and loyalty offers, and expanding vacations into a structurally differentiated revenue stream,” the company said.

“Apollo recognizes the important contribution that easyJet’s management team, together with easyJet’s employees, have made to the company’s success. Apollo places great value on people and believes that identifying and retaining key staff in the easyJet group will be of utmost importance.”

Either way, things are far from final this time either, when Apollo will have to submit a final and solid offer by August 7. Castle Lake, for its part, can also submit an offer until August 3. According to the way things are developing in the last week, it is not unreasonable to say that the last word has not yet been said in the war on the airline.