Apollo Global Management announced this week that it will acquire EasyJet in a deal valuing the low-cost carrier at approximately $7.7 billion, signaling increased private equity interest in European budget airlines [1]. The move comes after Castlelake, a private equity rival, withdrew its $7.3 billion bid for EasyJet, effectively clearing the path for Apollo's acquisition [1].
Following the announcement, speculation has arisen regarding further private equity bids in the sector. Hargreaves Lansdown strategist Anna Macdonald identified Jet2, another U.K. budget airline, as a potential takeover target due to its 'similar dynamics' to EasyJet and its recent share price performance [1]. Jet2's shares have risen about 60% from their lows, and were up 0.5% in afternoon trade on Friday [1]. Macdonald noted that U.K. equities, including airlines, have lagged global peers in valuation, making them attractive to investors and private equity buyers [1].
EasyJet's shares on the London Stock Exchange fell 0.48% in afternoon trading Friday, after closing the previous session 2.8% higher [1]. Macdonald commented that the airline sector remains challenging, citing its low margins, cyclical nature, and high regulation, but suggested that private ownership could lead to different financing strategies and potentially better prices for consumers [1].
A Jet2 spokesperson declined to comment on market rumors or speculation regarding potential takeover interest [1].
CONCLUSION
Apollo's acquisition of EasyJet for $7.7 billion has heightened private equity interest in European budget airlines, with Jet2 identified as a possible next target. The deal underscores the attractiveness of undervalued U.K. equities and may signal further consolidation in the sector.