Apollo Global Management is taking EasyJet private in a deal valuing the low-cost carrier at approximately $7.7 billion, or £5.7 billion. The acquisition follows rival private equity firm Castlelake's withdrawal of its $7.3 billion bid, clearing Apollo's path.
EasyJet's London-listed shares fell 0.48 percent in afternoon trading Friday, a day after closing 2.8 percent higher.
Anna Macdonald, investment strategy director at Hargreaves Lansdown, identified U.K. budget carrier Jet2 as a potential target for further private equity interest, citing its operational similarities to EasyJet. Jet2 was trading at a price-to-earnings ratio of six to seven times before its shares rose about 60 percent from that low point, Macdonald said on CNBC's Squawk Box Europe Friday. She added that private equity firms may begin to consider Jet2.
Jet2's shares rose 0.5 percent in afternoon trade Friday. A Jet2 spokesperson said the company does not comment on market rumor or speculation.
Macdonald said U.K. equity valuations have not kept pace with global peers, making the London market an attractive hunting ground for private equity buyers.
She described the airline sector as a tough industry with low margins, high cyclicality and extensive regulation, where both costs and demand can fluctuate significantly.
Private ownership could lead to different financing strategies for airlines, Macdonald said, potentially making operations less capital intensive and allowing for better consumer pricing. She cautioned, however, that private buyouts of international flag carriers are a trickier proposition than budget airlines, with less apparent upside.
EasyJet investors who choose to maintain their stake can roll their holdings into the new ownership structure. Takeover filings indicate the majority of investors are expected to accept the deal. Those filings also show that shareholders who roll into the new fund risk missing out on perks enjoyed by Apollo and other new owners, an arrangement that could erode certain shareholder rights.
