City advisers stand to receive fees totaling approximately £334.5 million following the sale of easyJet to US private equity firm Apollo Global Management in a transaction valued at £5.7 billion. The takeover, which offers shareholders 715 pence per share, has the backing of easyJet’s founder, Sir Stelios Haji-Ioannou, whose family retains a 15.3 percent stake in the airline.
Apollo, an asset manager overseeing more than $1 trillion, will cover £190.6 million in fees associated with financing the deal. Additional payments for corporate broking and financial advice from firms including Barclays, PJT Partners, and Citigroup are expected to total £22.5 million. Legal services rendered by Paul, Weiss, Rifkind, Wharton & Garrison and Watson Farley & Williams will earn fees of £39.2 million. Apollo’s public relations advisers will be compensated £3 million, while accounting, tax advice, and other related expenses are estimated at £25.1 million.
On the seller’s side, easyJet engaged financial advisers Evercore, BNP Paribas, Panmure Liberum, and Peel Hunt, who will share £32 million in fees, with legal advice from Clifford Chance generating £17.9 million in fees. Public relations counsel for easyJet will receive £2.3 million, alongside £2 million in other service-related costs.
Apollo plans to finance approximately £1.8 billion of the acquisition with its own capital and has secured debt commitments from 17 banks to support the transaction. Current shareholders will be offered the option to exchange their shares for “rollover shares” in the new ownership structure instead of accepting the cash consideration.
Industry observers note that post-pandemic challenges and recent fuel cost increases have pressured easyJet’s financial performance, factors that may have influenced the takeover valuation. Several union representatives, including cabin crew at easyJet’s Schiphol base and various European works councils, have expressed concern about the deal, particularly regarding Apollo’s financing strategy.
The acquisition entails a significant increase in debt, with plans to leverage easyJet with approximately £3.8 billion in borrowings. This capital structure raises questions about potential cost-cutting measures, outsourcing, and asset sales, such as sale and leaseback arrangements on owned aircraft, which unions warn could affect employment conditions beyond a 12-month commitment Apollo has reportedly made against “material” job losses.
Apollo’s investment approach involves a complex equity arrangement designed to comply with EU aviation ownership rules, including Midco 1 preference shares carrying a fixed 14 percent dividend that rank ahead of ordinary equity returns until a certain capital recovery threshold is met. Under this structure, Apollo is expected to hold up to 49.9 percent of the new company, while the founder’s shareholding could rise to around 45 percent through rollover shares.
Critics highlight that the highly leveraged structure may prioritize servicing debt and investor returns potentially at the expense of longer-term operational stability. Supporters argue that private ownership and Apollo’s capital injection may enhance easyJet’s capacity to navigate competitive pressures and market challenges.
As the transaction proceeds, attention remains on how the private equity ownership will balance financial obligations with the interests of employees, passengers, and other stakeholders in the low-cost airline sector.