EasyJet's stock did a loop on Thursday.
The day began with a surprise. Castlelake, a U.S. private-equity firm that finances airlines extensively, said it would not bid for the U.K. budget airline.
After deliberating, the firm told the London Stock Exchange it was walking away.
The news hit the shares hard at first. EasyJet fell more than 6% before recovering.
With Castlelake gone, Apollo Global Management is the buyer.
The deal is expected to close before next year's first quarter ends.
The path to a deal was not straight. Castlelake had been circling for months, and EasyJet's shares moved with every twist.
Castlelake is no stranger to the airline business. It has leased aircraft to about 200 carriers.
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It first made a $6.64 billion approach in June. EasyJet rejected it.
Then Castlelake came back with a proposal valued at $7.3 billion. That number topped its earlier approach, and the deal would have reshaped European aviation.
EasyJet gave that proposal tentative approval.
Apollo made its own bid last month, only days after that approval. The move set up a two-way fight, and then Castlelake walked away.
EasyJet is a 31-year-old budget airline, but the real value is on the ground. It holds prized slots at major European airports, including London Gatwick, Paris, and Geneva.
Those slots are the right to take off and land at specific times, and they are almost impossible to come by at busy hubs. EasyJet is considered an appealing buyout target for exactly this reason.
For private-equity firms, that kind of access makes an airline hard to copy. Apollo's Alex van Hoek, who leads European private equity at the firm, said EasyJet has a strong brand and a "differentiated market position."
EasyJet CEO Kenton Jarvis welcomed the deal, saying Apollo's experience in aviation makes it "a strong partner" as the airline accelerates its growth plans. He also said Apollo is committed to the business, its people, and its customers.
In U.S. dollars, the £7.15 per share payment works out to $9.63.
Some of that good news was already in the stock. Months of private-equity interest had pushed EasyJet shares up almost 50% by the close of trading in London on Wednesday.
Now the question is the finish. Apollo says it strongly supports EasyJet's employees and the airline's role in connecting travelers, but the shareholder payout depends on the deal actually closing on time.
For your portfolio, buyouts like this are a useful picture of how offers work. Once a public company agrees to go private, the offer price becomes the number that matters, and the day-to-day stock drama tends to settle down.
The stock can drift, but it tends to stay close to the offer until the deal is done.
EasyJet's London-listed stock, which trades under the ticker EZJ-GB, will ride out that process until the deal is done. The premium only becomes real when the deal closes.
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