EasyJet Agrees to £5.7bn Takeover Bid from Apollo Management, Trumping Castlelake's Offer

No-frills airline EasyJet says it has agreed in principle to a £5.7bn takeover proposal from US firm Apollo Management.

The bid trumps a previous bid from US investment firm Castlelake that EasyJet had also agreed to in principle at the weekend.

EasyJet is one of Europe's largest airlines. It employs more than 19,000 people, and flies around 1,200 routes across 35 European countries.

The Luton-based carrier said shareholders would receive £7.15 per share under the Apollo proposal, which it was intending to accept as it delivered "a superior outcome" to investors than the £6.90 per share proposal from Castlelake.

EasyJet said its board was now "no longer minded" to accept Castlelake's offer.

The latest statement does not mean a deal has been confirmed. Apollo has been set a deadline of 17:00 on 7 August to either make a firm bid for EasyJet or walk away. Castlelake's deadline to make a firm offer is 3 August.

Apollo's move came after Castlelake had made series of offers for EasyJet, which had initially been rebuffed by the carrier which accused the US firm of trying to buy it "on the cheap".

However, on Sunday, EasyJet said it had reached an agreement in principle with Castlelake, a US investment firm, over a potential takeover offer worth around £5.2bn.

One significant regulatory hurdle to any EasyJet takeover is that European Union regulations stipulate the carrier must be majority-owned by EU citizens.

Castlelake had proposed going into partnership with two EU nationals, businessmen Peter Bellew and Mark Breen. They would own an EU-based company that would have majority control of the airline.