Ryanair makes all-cash offer in attempt to buy Aer Lingus
Ryanair said today it planned to make a €694 million bid for Aer Lingus in a fresh attempt to gain control of its Irish rival.
Ryanair intends to make an all-cash offer of €1.30 per share via a wholly-owned subsidiary, Coinside, the airline said in a statement today. Ryanair already holds a 29.8 per cent stake in Aer Lingus, acquired in 2006 and 2007.
Having been blocked from taking control of Aer Lingus in the past by antitrust rulings, Ryanair said it is renewing its approach amid changed circumstances following the consolidation of Europe's network carriers, a decline in traffic in Dublin that leaves space for new entrants, and Government plans to sell a 25 per cent Aer Lingus stake in a State-asset auction.
"This offer represents a significant opportunity to combine Aer Lingus with Ryanair to form one strong Irish airline group," chief executive Michael O'Leary said in the statement.
He pledged to help lift Aer Lingus's annual passenger total to 14 million over five years from 9.5 million today and said Ryanair would also invest in expanding trans-Atlantic flights.
To complete the deal, Ryanair would have to convince authorities that a combined airline controlling 80 per cent of traffic between the United Kingdom and Ireland would not stifle competition.
Minister for Transport Leo Varadkar said he would make a statement on the offer after consulting with his Cabinet colleagues.
In a statement, Fianna Fáil transport spokesman Timmy Dooley said the Government should use its stake to block Ryanair and sustain competition.
European Union regulators blocked Ryanair's bid for Aer Lingus in 2007, saying a takeover would allow the discount airline to dominate 35 routes and control 80 per cent of the market in Dublin.
A spokesman for the European Commission in Brussels, declined to comment today on Ryanair's plans to revive the bid. The EU regulator said in 2007 that it could not force Ryanair to sell its remaining stake in Aer Lingus.
Ryanair is also facing an investigation by the United Kingdom's Competition Commission of its holding in the smaller carrier after the national regulator said it may lead to higher prices.
The Office of Fair Trading, Britain's lesser antitrust watchdog, asked for the investigation earlier this month.
Ryanair started with one 15-seater plane in 1985. In almost two decades in charge, Mr O'Leary's low-cost model has come to dominate European aviation. Ryanair carried 77 million passengers last year compared with 9.5 million passengers at Aer Lingus.
Aer Lingus's shareholders include Etihad Airways, which bought a 3 per cent stake in Irish airline in May.