US Private Equity Firm Apollo to Acquire EasyJet in £5.7 Billion Deal
The acquisition, backed by the airline's founder, will see the budget carrier leave the London stock market and raises concerns among pilots.
EasyJet is set to be acquired by US private equity firm Apollo Global Management in a £5.7 billion deal, a transaction that will result in the budget airline delisting from the London stock market. The sale has received support from the airline's founder, Sir Stelios Haji-Ioannou, whose family retains a 15.3% stake in the company.
Financial Windfall for Advisors
The transaction is anticipated to generate substantial fees for various professional services, with an estimated £334.5 million earmarked for bankers, lawyers, and public relations advisors. According to takeover documents, Apollo will allocate £190.6 million towards financing arrangements and £22.5 million to brokers and advisors. Lawyers involved in the deal are expected to receive £39.2 million, with public relations teams set to earn £3 million and tax advisors an additional £25.1 million.
On EasyJet's side, the airline's bankers are projected to share £32 million, its lawyers £17.9 million, and public relations professionals £2.3 million. Other professional services and expenses associated with the deal are estimated at £2 million.
Pilot Concerns Emerge
The news of the significant advisor fees coincided with concerns voiced by EasyJet pilots. The British Airline Pilots’ Association (Balpa), representing approximately 4,000 pilots, has highlighted a lack of clarity regarding future employment, pensions, operational strategy, and productivity initiatives following the acquisition. Pilots are seeking assurances that they will be informed and consulted throughout the transition.
The court document related to the takeover, spanning 320 pages, outlines the pilots' need for greater transparency on these matters. Their job security is reportedly guaranteed for only one year post-takeover, prompting their collective unease.
If approved by investors on November 9, the acquisition will mark another instance of a British company being purchased by US private equity. This trend has been a notable feature of the corporate landscape, with significant UK-based firms frequently becoming targets for overseas investment.