Easyjet has agreed to a £5.7 billion takeover by Apollo after rival suitor Castlelake withdrew from the months-long bidding contest for the low-cost carrier.

In a joint announcement on Thursday, the New York-headquartered private markets firm said it had "reached an agreement on the terms and conditions of a recommended cash acquisition."

The deal would remove one of the FTSE 250's best-known consumer brands from the London Stock Exchange, extending a run of high-profile take-privates that have drawn scrutiny over the depth and competitiveness of UK public markets.

Easyjet founder Stelios Haji-Ioannou endorsed the deal, saying he was "pleased with Apollo's strategic intentions" for the airline he established in 1994.

"The fact that Apollo, as one of the most well-resourced and experienced institutional investors in the world, has decided to back and grow Easyjet, the leading member of the Easy family of brands, is testament to the strength of the easy brand and the business model of Easygroup," Haji-Ioannou said in his first public remarks since takeover interest surfaced.

He confirmed that he and his family intend to remain long-term major shareholders under the new ownership structure.

Castlelake Withdrawal Ends Bidding War

The announcement followed Castlelake's decision to pull out of the process, closing a protracted takeover battle between the two investment firms.

Castlelake said it was "very appreciative of the constructive engagement with the Easyjet board and management team" but would not proceed with a firm offer for the carrier.

The Minneapolis-based alternative investor, which manages approximately $38 billion in assets, submitted a series of unsolicited proposals for Easyjet between May and July, most of which were rejected by the airline's board. A preliminary £5.5 billion offer was eventually accepted, which would have paved the way for the FTSE 250 group to leave the London stock market.

However, Apollo trumped that bid days later with a £5.7 billion proposal. Easyjet's board withdrew its support for Castlelake and backed Apollo's offer, describing it as providing "an attractive combination of value, strategic alignment and long-term stewardship."

Apollo's offer represents an 81 per cent premium to Easyjet's closing share price before either party's interest became public, and a 22 per cent premium to the airline's four-year average share price.

The Takeover Panel had set a deadline of Friday for both firms to submit formal offers.

EU Ownership Rules Addressed

As part of its formal bid, Apollo outlined its plan to comply with European Union regulations requiring aviation groups to be majority-owned and controlled by EU citizens.

Apollo stated that Haji-Ioannou's commitment to roll his family's stake into the new parent company, combined with a decision to place a five per cent stake into an EU trust, would satisfy the bloc's ownership requirements. Under the proposed arrangement, Apollo would hold 49.9 per cent of the airline.

Accepting the offer would make Easyjet the first major European carrier to be held in private markets. Most of the continent's leading airlines are either part of large listed groups—such as British Airways owner IAG—or independently traded on stock exchanges, like Ryanair and Jet2. The transition would also test whether private ownership can deliver the same access to capital and governance transparency that public markets provide for a carrier of Easyjet's scale.

Apollo previously held stakes in low-cost carrier Aeromexico and Sun Country Airlines, the latter of which it listed on Nasdaq in 2021. The firm's private credit division also maintains a significant presence in the aviation sector.

PJT Partners, Barclays, and Citigroup advised Apollo on the transaction.

(London Stock Exchange statement)