The fresh offer signals a bidding battle could now emerge between the two US investors for ownership of the British carrier.
Apollo’s offer of £7.15 per share beats Castlelake’s bid of £6.90 per share.
EasyJet said the proposal delivered a “superior outcome” for shareholders and as such, “the easyJet Board is no longer minded to recommend the Castlelake Proposal.”
Also read: EasyJet shares reveal deal risk as $7.3 billion takeover advances
Apollo has until 7 August to make a firm offer or walk away under UK regulations.
EasyJet, listed in London, was set to be taken private by Castlelake after the carrier accepted its fifth beefed-up proposal on Sunday.Despite rebuffing the early offers, EasyJet opened the door to talks on June 25, agreeing to give the US fund access to commercial information in the hope of securing a more attractive proposal.
In May, EasyJet reported losses deepened by 27 percent in the first half of the financial year to £377 million as the US-Iran conflict sent fuel prices soaring and upended travel plans.
The company warned that the second half of the year would also be affected, though chief executive Kenton Jarvis said the airline was “well placed” to ride out the turbulence.