Apollo Global Management gatecrashed Castlelake's agreed £5.5bn takeover of easyJet with a £5.7bn counter-offer backed by the airline's board, valuing shares at £7.15 versus Castlelake's £6.90. The New York firm's move, unveiled Friday, sent shares surging 14.3% to £6.72 and sets up a bidding war between two US investment giants with deep aviation portfolios. Apollo's private equity unit would acquire the carrier, pledging to support current management and scale the Holidays division into a differentiated earnings stream.

Castlelake has until August 3 to submit a sixth bid, while Apollo faces an August 7 deadline under UK takeover rules to firm its offer or walk away. Both suitors must navigate EU regulations requiring 51% European ownership and control — a hurdle that has long deterred IAG from pursuing easyJet. Securing the blessing of founder Sir Stelios Haji-Ioannou, the largest shareholder, remains critical; Apollo has committed to preserving his 0.25% revenue royalty deal, worth £25mn last year.

Top-15 shareholder Magallanes Value Investors argues easyJet remains undervalued even at £7.15, citing irreplaceable airport slots, fleet growth plans, and a strong balance sheet. Apollo's aviation track record includes stakes in Aeromexico, Sun Country Airlines, and Atlas Air, plus financing for Air France-KLM and Virgin Atlantic. Castlelake owns roughly a third of SAS and has decades of aircraft financing experience.

The contest hinges on price and structure. Apollo's higher bid and management backing give it an edge, but Castlelake's willingness to return with a sixth offer signals resolve. Either buyer faces the same European ownership test, and any deal likely precedes a future exit — whether a sale to a European flag carrier or a relisting — once the airline is freed from quarterly public-market scrutiny.