EasyJet agrees $7.7 billion Apollo deal as Castlelake walks away

Rewrites with Apollo's firm offer and details

Aug 6 (Reuters) - Apollo Global APO.N has agreed to buy European budget airline easyJet EZJ.L in a deal that values the carrier at about £5.70 billion ($7.7 billion), the companies said on Thursday, as rival suitor Castlelake abandoned its pursuit.

The deal ends months of uncertainty surrounding one of Europe's biggest low-cost airlines as the industry grapples with rising costs from the Iran war.

Castlelake earlier on Thursday withdrew from the takeover race without giving a reason.

Castlelake had tabled five bids for easyJet before Apollo entered the fray in July, topping Castlelake's £5.5 billion proposal and securing the backing of the airline's board.

Following the deal, Apollo anticipates that the family of easyJet founder Stelios Haji-Ioannou and other shareholders remaining invested will hold between 45.1% and 49.9% of the ordinary capital of the purchasing vehicle.

An EU management trust will hold up to 5%, Apollo's funds will hold the rest, up to a maximum of 49.9%.

"Having carefully reviewed the proposal by Apollo, my family members and I have decided to support the recommended acquisition announced by the easyJet board," Haji-Ioannou said in a separate statement.

EasyJet shares, which have rallied more than 65% since the initial takeover interest was disclosed, were up 3.6% at 675 pence by 1406 GMT.

The £7.15 per share offer, which easyJet's board unanimously recommended, represents a premium of about 81% to easyJet's closing price of £3.94 on May 28, the last trading day before Castlelake's interest became public.

($1 = 0.7424 pounds)

(Reporting by Yamini Kalia and Prerna Bedi in Bengaluru. Editing by Jonathan Ananda and Mark Potter)

((Yamini.Kalia@thomsonreuters.com))