EasyJet's board switched its recommendation Friday, backing a £5.7 billion ($7.7 billion) cash takeover offer from Apollo Global Management five days after agreeing in principle to a smaller bid from fellow U.S. private-equity firm Castlelake, opening a bidding war for one of Europe's largest budget airlines.

The reversal puts the 30-year-old Luton-based carrier — a business built on cheap Continental fares that helped remake European air travel — on a path to be taken private by whichever firm can lock in a firm bid before U.K. Takeover Panel deadlines next month. Apollo's £7.15-per-share cash offer exceeds Castlelake's £6.90-per-share proposal by about $1 billion in equity value and represents an 81 percent premium to EasyJet's May 28 close of £3.94, the last trading day before Castlelake's interest became public.

The switch

EasyJet said Apollo's proposal delivered "a superior outcome" for shareholders and that the board was "no longer minded" to recommend the Castlelake deal it had accepted Sunday. The company first opened its books to Apollo on June 25, CBS News reported. Shares in EasyJet jumped nearly 15 percent Friday to about 673 pence, the BBC said, extending a 15 percent gain for the year. The board described the Apollo bid as "an attractive combination of value, strategic alignment and long-term stewardship of the business."

The deadlines

Castlelake has until Aug. 3 to firm up its offer or walk away. Apollo has until Aug. 7 to do the same. EasyJet said Apollo will also offer a stub-equity alternative letting shareholders roll their existing holdings into the buyout vehicle and keep their voting rights, though those terms remain under discussion.

The EU catch

Any deal will run into a European Union rule that carriers licensed in the bloc must be majority-owned by EU citizens. Castlelake had proposed partnering with two EU nationals, businessmen Peter Bellew and Mark Breen, to hold majority control through an EU-based company. Apollo said it will take "all necessary steps" to meet EU conditions but has not disclosed a specific structure. Sir Stelios Haji-Ioannou and his family, who founded the airline in 1995, still hold about 15 percent of the shares.

What Apollo sees

EasyJet flies about 1,200 routes across 35 European countries and holds take-off and landing slots at Gatwick and Paris Charles de Gaulle — assets analysts say make it a rare public target in European aviation. Susannah Streeter, chief investment strategist at Wealth Club, told the BBC that Apollo was drawn to the carrier's holidays arm as much as its route network. "Package holidays generate higher margins and more predictable revenues than airline tickets alone," Streeter said.

Bernstein analysts warned Friday that Apollo's price leaves little room for error, writing in a note that "a heroic cost restructuring and earnings inflection, far above what we currently forecast, would be required for the deal to make sense at this price," according to a CNBC report. EasyJet's first-half pre-tax loss widened to £552 million from £394 million a year earlier, weighed down by higher fuel costs and softer bookings tied to the U.S.-Iran war.

Castlelake — which EasyJet earlier this year accused of being "highly opportunistic" for trying to buy the carrier "on the cheap" — declined to comment on the reversal. "The bidding war now comes down to price," said Dan Coatsworth, head of markets at AJ Bell, adding that shareholders "will be putting their feet up and enjoying the ride."