In a last-minute reversal, Apollo Global Management has clinched a deal to acquire easyJet for £5.7 billion, outbidding Castlelake and concluding a month-long takeover battle for the low-cost airline.

easyJet stated on Friday that it had reached an agreement in principle on an offer of 715 pence per share, with the board intending to recommend the transaction to shareholders.

Apollo's intervention disrupted a previously agreed £5.5 billion deal between easyJet and the US private credit group Castlelake, which had been set to make a formal offer by August 3.

easyJet said, "The proposed cash acquisition provides easyJet shareholders with a higher cash value than the latest offer of 690 pence per share from Castlelake, thereby delivering a superior return to shareholders."

Apollo's move marks the latest development in the prolonged takeover saga for easyJet. For weeks, the airline had rejected proposals from Castlelake, only agreeing to its latest scheme last Sunday.

Apollo indicated it would continue to execute easyJet's existing growth strategy, which is centered on expanding its fleet with larger, more fuel-efficient aircraft and developing its holiday business.

The US investment group stated in a declaration, "Apollo has followed easyJet for many years and has always considered it one of the most attractive companies in the global aviation industry."

Shares in easyJet rose 14% in early Friday trading to £6.70.

A major shareholder commented, "It is pleasing to see the market working, with multiple parties now seeing the value we see—the genuine value inherent in a strong route network and brand."

The shareholder added that they hoped Apollo's move would trigger a bidding war, stating, "What we hope for now is the emergence of competition."

Apollo has previously invested in the aviation sector, including in Mexico's Aeromexico, low-cost carrier Sun Country Airlines, and cargo group Atlas Air. The group has also provided financing for Air France-KLM and Virgin Atlantic.

This deal follows easyJet's rejection of four previous offers from Castlelake, which it considered to undervalue the company, though it stated last month it would engage in talks to seek a more compelling bid.

easyJet investors had previously indicated they expected the airline's board to engage with Castlelake at a price around 700 pence per share.

Last Sunday, the two parties reached a preliminary agreement for Castlelake to acquire the airline at 690 pence per share in cash, valuing the airline's equity at approximately £5.5 billion on a fully diluted basis.

With its network of take-off and landing slots at major European airports and a substantial order book for Airbus aircraft, easyJet has long been viewed as a potential takeover target.

Founded as a low-cost alternative to British Airways, the airline's route network has grown to become one of the largest in Europe.

However, its share price has struggled to recover since the COVID-19 pandemic grounded the aviation industry in 2020 and has lagged behind low-cost rival Ryanair and British Airways' parent company IAG.

Apollo's offer would also allow existing shareholders to roll their investment into the new company—enabling airline founder Sir Stelios Haji-Ioannou to transition into the private entity. The statement also clarified that the royalty deal for payments to Haji-Ioannou for the use of the brand would continue.

There had previously been questions about how Castlelake, a US group backed by Brookfield, would comply with European rules requiring a majority of ownership and control to be located within the European region.

Castlelake had arranged for two former Irish airline executives to lead an entity holding 51% of the company, but regulators still required them to have European funding sources to meet the requirements.

Like Castlelake, the US group backed by Brookfield, Apollo may also face scrutiny over how it will adhere to European regulations mandating that a majority of ownership and control reside within the European region.