Take-Private Buyouts Gain on Blue Chips as the IPO Exit Route Narrows

Buyout firms are going after bigger listed companies

Private equity firms want to buy large public companies again, and the reason is mostly arithmetic. Listed companies whose shares have been marked down are now cheaper than many private assets. Meanwhile the stock market is still a poor place for buyout firms to sell what they already own. The result is an industry that is happy to buy on public markets but rarely sells through them.

The deals this autumn show how this is playing out. EasyJet's chief executive, Kenton Jarvis, said on October 8 that Apollo Global Management's £5.7 billion ($7.5 billion) takeover of the budget airline should close early next year. He added that he was hearing no real resistance from shareholders, while regulators were still an open question.41 In the US, Workday shares rose about 7% in mid-September. CNBC reported that the people trying to finance a possible Silver Lake take-private were raising equity and putting together financing packages.51 Earlier in the year, a group including EQT, GIP and CalPERS agreed to buy utility AES in a deal valued at about $42.2 billion including debt. That made it the largest US take-private recorded through April.12

The reasoning is simple. Fund managers want to put money to work, cheap public companies offer a way to do it, and the usual exit routes are still partly blocked.

The easyJet deal shows how these auctions work now

The easyJet contest is a good example of how take-private auctions are run in 2026. Castlelake went first. Several of its proposals were rejected before the board said it was minded to back a fifth cash offer of £6.90 a share.46 Five days later, Apollo offered £7.15 a share, Castlelake withdrew by August 6, and Apollo and the airline announced their agreement.46

The price looks generous only because the starting point was so low. Apollo's offer was 81% above where easyJet closed on May 28, the last trading day before Castlelake's interest became public. Before the bidding began, war between the US and Iran had driven up jet fuel prices, and the shares had lost more than a third of their value.50 In other words, the bid takes advantage of a public valuation hurt by events that a private owner can wait out.

Apollo has also tried to reduce the cost of walking away from the stock market. Its offer lets existing shareholders swap their holdings for equity in the buying vehicle, so they can stay invested and keep voting rights.44 Rules may matter more than price, though. UK and EU law requires airlines to be majority-owned and controlled by regional nationals, so a US firm cannot take full control. The deal has been structured to comply with those rules.48 Analysts quoted in trade coverage expect close scrutiny from EU and UK authorities.46 Not everyone thinks the price is safe: Bernstein analysts said the valuation would need substantial cost improvements to make sense.44

The UK is a hotspot for these deals. White & Case found that international investors took part in deals making up 72% of UK public M&A volume and 94% of its value. The firm's head of UK public M&A put this down to a long-running valuation gap between UK-listed companies and their global peers.18 Nuveen's £9.9 billion take-private of Schroders, the largest standalone UK asset manager, is one of the year's flagship deals.18

Software is a separate case

Workday shows how software has become a special situation. Reuters first reported Silver Lake's interest on August 13, and the shares jumped 18% that day.52 The deal is far from certain. In August, CNBC's David Faber warned that financing could be hard to put together, before turning more optimistic in September.53 Workday's management seems to be arguing for staying independent. It launched a $4 billion buyback a few weeks after the talks became public and scheduled an analyst day for October 13.55

The bigger story is AI. One explanation for buyout interest is that public investors have been pricing software firms low over fears of AI disruption, even though these businesses still have sticky customers and recurring revenue.55 Most data, however, points to sponsors pulling back from technology overall. EY found that the value of tech-focused private equity deals halved compared with a year earlier, while non-tech deals rose 9%.12 A possible Workday buyout looks like a bet on one company's position, not evidence that sponsors are piling back into software.

Buyout firms pay less than corporate buyers

Financial buyers are paying lower multiples than corporate acquirers. Large take-private and investor-led offers from January to April 2026 were priced at a median of about 11.6 times EBITDA. Big US corporate acquisitions in the same period were closer to 13.9 times.12 The gap follows from how leveraged buyouts work. Because part of the price is funded with debt, sponsors need a cheaper entry price to hit their target returns.12

Premiums depend heavily on where the share price started. Intertek's 37.5% one-day premium came in a hostile approach. AES's final price was actually below its previous close, because the shares had already risen on reports of a sale.33

The IPO market is not the reliable exit it used to be

The other half of the story is exits. Here the coverage disagrees, and that disagreement matters.

The optimistic view held earlier in the year. Bankers at J.P. Morgan and Morgan Stanley said that up to a third of 2026 IPOs could be private equity firms selling portfolio companies.4 Blackstone's Jon Gray had said "the deal dam is breaking."1

The data since then is weaker. In the first half of 2026, IPOs made up only 17.3% of US private equity exits by value and 3.6% by number of deals, even after the record SpaceX listing in June.9 Overall exit value fell about 11% compared with a year earlier, according to PitchBook figures. More IPOs have been postponed as bond yields rose and investors began questioning whether spending on AI infrastructure will pay off.9 S&P Global counted just 13 private equity IPO exits worldwide in the first quarter. A Preqin executive said IPO markets had not broadly reopened.5

Other trackers paint a somewhat better picture. EY found that announced exit value rose 9% in the first half, with sales to corporate buyers making up 71% of it.12 Both pictures can be true at once. Sponsors are getting out mainly by selling to corporations, not through the stock market. In EY's survey, 90% of fund managers said they would accept a discount to their original valuation in exchange for immediate liquidity.33

The pressure behind these trade-offs is large. In the US, about $860 billion, more than 40% of total buyout assets, sits in companies held for more than seven years, according to PitchBook.40 PwC calls continuation vehicles and GP-led secondaries the main release valve, though investors are wary of the conflicts of interest they create.2 The industry's own expectations show where it thinks the opportunities are. In a BDO survey, 88% of respondents said take-privates will become more attractive over the next year. They described these deals as a way around crowded auctions for private companies.38

Private credit loses some of its pricing edge

The financing behind these deals is also shifting. At the start of the year, cheaper debt in both the leveraged loan and private credit markets had put large listed companies within reach of cash-rich buyers.13 The recent trend has gone against direct lenders.

PitchBook LCD data shows new US private credit loans priced at an average spread of 502 basis points in the three months to August 31, up from 475 in the first quarter. The premium over syndicated loans widened to 162 basis points.22 The cause is the lenders' own funding, not the quality of their borrowers. Retail investors have been pulling money out of direct lending funds, so lenders exposed to them have had to reconsider portfolio construction and position sizes.29 PitchBook's latest monitor says buyout financing from direct lenders fell to its weakest level in three years, while the syndicated market won back share.21 Some loans first arranged by direct lenders have since been moved into the syndicated market.22

The effect on take-privates is mixed. Large, well-known targets such as Workday or easyJet can turn to banks and the syndicated market, which are pricing more aggressively than direct lenders. Sponsors who rely on private credit for its speed and confidentiality now pay more for it. Lawyer David Ridley of White & Case put it this way: choosing private credit used to be an easy call and has become "much more of a debate."29

Take-privates are a symptom of a strained model

It would be easy to read the run of blue-chip bids as a sign that private equity is back. A more accurate reading is that take-privates are one of the few strategies that suit the industry's current constraints. Fund managers have huge amounts of uninvested capital. US managers alone hold an estimated $1 trillion, according to PitchBook.13 They need to deploy it, they cannot easily sell what they already own, and they face a stock market that keeps pricing some companies below what buyout firms think they are worth.

This strategy has costs. Buying through the public market while avoiding selling into it leaves a growing amount of capital tied up for longer holding periods. Some commentators now argue that returns will fall short for funds raised between 2017 and 2021, and that the old leveraged buyout model is giving way to longer-term ownership.40 Cheap entry prices also only pay off if there is eventually a buyer, and the stock market has so far been an unreliable one.

The next milestones are easyJet's scheme document, due October 1545, and whether Silver Lake turns months of financing talks into a signed Workday deal. If both go ahead, the pattern of private funds buying public companies will continue. That will not resolve the exit backlog, which is still the industry's biggest problem.