U.S. ​private equity giant Apollo Global Management launched a £5.7 billion ($7.65 billion) offer for budget airline easyJet on Friday, outbidding ​rival Castlelake and ​potentially opening the door to a full-blown takeover battle.

Following Apollo's proposal for about £7.15 per easyJet share, the easyJet board said it was no longer minded to recommend Castlelake's ⁠offer of £6.90 per share, which the two sides had agreed in principle only days earlier.

Shares in easyJet rose as much as 15% to £6.75 in early Friday trade to their highest since February 2022, still below Apollo's bid price. Even after Castlelake's bid on Sunday, easyJet's shares ​have struggled to ‌keep up gains ⁠over caution about regulatory ⁠hurdles.

EASYJET, APOLLO CLAIM 'SUPERIOR OUTCOME'

Apollo said it was committed to taking "all necessary steps" to satisfy any merger control ​and EU subsidies-related clearances required to complete the deal.

"The proposed cash ‌offer delivers a superior outcome for easyJet shareholders by ⁠providing a higher cash value than Castlelake's latest proposal," easyJet and Apollo said in a joint statement.

Apollo must announce a firm offer for easyJet by August 7 or walk away. Castlelake has until August 3.

"Apollo believes in easyJet’s existing strategy of evolving and strengthening the low-cost carrier model," Apollo said.

Apollo said it plans to keep the easyJet brand after the potential acquisition by continuing the existing brand licence agreement between easyJet and Stelios Haji-Ioannou's easyGroup.

That could prove more attractive to Haji-Ioannou, the airline's founder and largest shareholder, who owns ‌roughly 15% of the firm with his family, and collects a ⁠0.25% royalty on easyJet's revenue for licensing the "easy" brand.

Castlelake in ​May went public with its interest to buy easyJet and was initially met with four rejections from the airline's board.

In late June, however, the British firm opened its books to Castlelake in a ​bid to ‌draw a higher offer, signalling its willingness to sell at the right ⁠price.

($1 = £0.7447)

(Reporting by Yamini Kalia and Yadarisa ​Shabong in Bengaluru; Editing by Rashmi Aich, David Goodman and Jan Harvey)