The two rival investment firms bidding to buy European budget airline easyJet will have to submit formal bids by the end of this week or walk away from any potential deal.
US investment firms Apollo Global Management and Castlelake will both have until 5pm UK time on Friday (7 August) to announce a “firm intention to make an offer” for easyJet under the UK’s “put up or shut up” (PUSU) takeover rules.
EasyJet’s board reached an agreement in principle to accept Apollo’s offer of £7.15 per share, which was made on 10 July.
The airline said in a statement issued on Monday (3 August) that its board “was no longer minded to recommend” Castlelake’s earlier bid of £6.90 per share. EasyJet had initially accepted Castlelake's deal in principle before Apollo made its higher offer a few days later.
Castlelake had originally been required to make a formal offer for easyJet by 5pm on Monday (3 August) but this has now been moved to Friday so that the two bids are “aligned” with the same deadline.
Any final bids could face regulatory challenges with the EU reported to be preparing a review of airline ownership rules to prevent foreign investors from gaining effective control of carriers.
Currently, European airlines are required to be majority-owned and controlled by EU countries or citizens. This includes UK-based airlines, such as easyJet, which operate flights entirely within the EU. Both Castlelake and Apollo have proposed ownership structures to try to comply with existing EU rules.
EasyJet said it had been “providing diligence access” to both Apollo and Castlelake, but added that there could be “no certainty that any firm offer will be made”.