Apollo Global Management has effectively moved to hijack Castlelake's attempt to acquire easyJet by launching a higher £5.7bn bid for the budget airline.

Apollo Global Management, one of the world's largest alternative asset managers and private-equity firms, has agreed key financial terms on a possible £5.7bn cash offer for the airline, prompting the board to withdraw its backing for the rival bidder.

Apollo's proposed offer of £7.15 a share tops Castlelake's £6.90 pre share proposal and values the airline at an 81% premium to its pre-bid share price.

easyJet said it would be prepared to recommend Apollo's offer if a firm offer is made, while Castlelake, which has wooed the carrier for several months with multiple improved bids, now has until 7 August to respond.

Shares jumped as much as 15% in early trading.

Apollo has argued that it supports easyJet's existing strategy, including expanding its holidays business, strengthening ancillary revenues and retaining the airline's brand, while offering eligible shareholders the option to roll over their investment into the acquisition vehicle. The private equity firm also pledged to work towards securing regulatory approvals, including EU ownership clearances.

Apollo has built a reputation for owning or backing a surprisingly wide range of well-known businesses. Some of the more recognisable names associated with the firm include Yahoo,
Cox Media Group, The Venetian Resort Las Vegas and Athene, a major retirement-services and annuities business.

The proposed takeover remains subject to a formal offer and regulatory approval, but Apollo has seized the initiative in what is shaping up to be a bidding war. According to Susannah Streeter, chief investment strategist at Wealth Club, the contest showed private equity investors were increasingly targeting UK-listed companies they believe are undervalued.

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