Easyjet has agreed to a takeover by private equity giant Apollo in a deal worth £5.7billion, concluding a long-running bidding war for the budget airline. 

The announcement came after Castlelake, another US firm which had made several offers for Easyjet, pulled out of the race. It had been given until 5pm on Friday to make a formal bid that could trump Apollo's £5.7billion proposal. 

But this afternoon the company said that following ‘careful consideration’ it had decided not to make an offer, leaving Apollo as the sole bidder for the airline.

Soon after, Easyjet confirmed it had accepted Apollo's £7.15-per-share offer. 

Kenton Jarvis, chief executive of Easyjet, said he believed Apollo's 'experience in the aviation sector makes it a strong partner for easyJet as we accelerate our growth plans and continue to deliver great value and service for our customers.'

‘Castlelake is very appreciative of the constructive engagement with the easyJet Board and management team, and would like to thank them for their time and consideration of this potential transaction,’ it added.

Easyjet shares have gained over 30 per cent since Castlelake made its first offer, and gained a further 3 per cent following the announcement.  

The defeat in the bidding war will sting for Castlelake. In early July, the company offered Easyjet a £5.5bn takeover offer which the airline’s board said they were ‘minded to recommend’ after previously rejecting four previous offers for being ‘highly opportunistic.’

But that £5.5billion figure was trumped days later when Apollo submitted a £5.7bn bid, which was accepted by easyJet’s board as a ‘superior outcome’ for shareholders.

Sir Stelios Haji-Ioannou, founder of Easyjet, said: 'I am pleased with Apollo’s strategic intentions for the easyJet business, which aim to create more growth. 

'The fact that Apollo, as one of the most well-resourced and experienced institutional investors in the world, has decided to back and grow Easyjet, the leading member of the easy family of brands, is testament to the strength of the easy brand and the business model of easyGroup Ltd.

He added: 'My family and I intend to remain invested as long-term major shareholders of easyJet for the next chapter in the company’s journey.'

The bidding battle comes after the airline’s share price slumped this year, leaving it a prime target for predators.

Profits fell 70 per cent to £85million in the three months to June as the Iran war fuelled a surge in fuel prices, and customer demand fell.

While Apollo triumphed in its bidding battle with Castlelake, the company faces fresh hurdles in its pursuit of Easyjet which is expected to attract close scrutiny from regulators.

The European Union is reportedly preparing to review ownership rules to prevent foreign investors gaining control.

The rules still apply to easyJet after it established a subsidiary in Austria to allow it to continue to operate flights in the bloc after Brexit.

If approved, Easyjet will become the latest British firm to fall into foreign ownership after a spate of takeovers in recent months.