EasyJet suitors have until Friday to make a formal bid after the airline pushed back the deadline for US asset manager Castlelake to make an offer to match that of rival Apollo.

The airline said it still recommended investors accept Apollo’s £5.7billion offer, but Castlelake had until 5pm on Friday to submit an improved bid, after previously setting a deadline of 5pm yesterday.

EasyJet rejected four Castlelake bids, branding them ‘highly opportunistic’ and accusing it of seeking a deal ‘on the cheap’ – before then agreeing a £6.90-a-share offer in early July.

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

EasyJet has since provided due diligence access to both prospective buyers to run the rule over the business.

‘Friday’s outcome will reveal if appetite for easyJet has been affected by latest events in the Middle East,’ said Russ Mould, investment director at AJ Bell.

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. 

A rise in late bookings in that period failed to offset a fall in reservations following the outbreak of war.

Even if a formal takeover is agreed this week, questions remain over ownership structures. 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.

Any bid is also likely to require the backing of founder Stelios Haji-Ioannou and his family, who still have a 15.3 per cent stake.

If Apollo is successful, it would add to the private equity firm’s portfolio of airlines. It part-owns Atlas Air and last year its private credit arm lent $745million to Virgin Atlantic for its slots at Heathrow airport.