Budget airline easyJet has agreed to a £5.7 billion acquisition by a US investment giant, Apollo Global. The announcement comes after easyJet reached a preliminary agreement with Apollo, surpassing previous offers from Castlelake, another American investor. Despite the positive market response with a 14% surge in easyJet’s shares to 670p, there remains uncertainty as Castlelake might counteroffer.

Apollo’s proposal values each easyJet share at £7.15, following discussions with Castlelake regarding a potential takeover. The impact of this deal on easyJet’s customers and employees is still unknown, but it reflects a trend of UK companies being acquired by foreign entities or going private.

The offer from Apollo represents an 81% increase from easyJet’s previous closing share price of £3.94 before Castlelake’s interest emerged. This offer also exceeds the shares’ performance over the past four years. Despite facing challenges during the Covid crisis and trailing behind competitors like Ryanair and British Airways’ owner IAG, easyJet remains an attractive investment for Apollo.

Apollo expressed confidence in easyJet’s future growth potential, particularly highlighting the success of its easyJet Holidays business. The investment firm emphasized the importance of retaining key personnel within the easyJet Group, citing previous success in growing employee bases in other airline investments.

Founded in 1995 by Sir Stelios Haji-Ioannou, easyJet aimed to provide affordable air travel in Europe. While Sir Stelios and his family retain a 15.3% stake in the airline, equity analysts anticipate a competitive bidding process between Apollo and Castlelake until August 7.

Analysts foresee significant potential for easyJet’s future despite recent performance challenges. However, there are concerns about the potential debt accumulation and its impact on the company’s future performance. Apollo, known for its investments, including parcel delivery giant Evri in the UK, sees easyJet as a valuable addition to its portfolio.