Ryanair makes cash offer for Aer Lingus
RYANAIR HAS made its third takeover bid for Aer Lingus, saying the long-term future of its rival “can best be secured within one strong Irish airline group, led by Ryanair”.
At €1.30 per share, Ryanair’s new cash offer values Aer Lingus at €694 million, meaning the Government could receive €173.5 million for its 25 per cent stake.
Ryanair, which already owns a 29.82 per cent stake in Aer Lingus, said it believed “circumstances have changed materially” since it made its first unsuccessful bid for Aer Lingus in late 2006. It said there were “compelling reasons” why the fresh bid should be accepted by shareholders and approved by EU competition authorities.
“This offer represents a significant opportunity to combine Aer Lingus with Ryanair, to form one strong Irish airline capable of competing with Europe’s other major airline groups led by Air France, British Airways and Lufthansa,” said chief executive Michael O’Leary.
Ryanair said it would keep Aer Lingus as a separate airline and develop its brand as part of an airline group that, if its bid was successful, would have combined traffic of almost 90 million passengers a year.
A spokesman for Aer Lingus said the company had no comment on the takeover bid.
In a statement outlining the details of its offer to buy the entire share capital of Aer Lingus, Ryanair says it understands the Government plans to sell its stake in early 2013.
It argues that if the stake is sold to a foreign-owned company, a break-up of Aer Lingus would be “inevitable”.
Abu Dhabi-based Etihad Airways recently built up a near 3 per cent stake in Aer Lingus, with chief executive James Hogan noting in April that the company was “keen to have a look” at the Government’s 25 per cent holding.
Ryanair’s offer, which will be made through its wholly-owned subsidiary Coincide Ltd, represents a 38 per cent premium over Aer Lingus’s closing price of 94 cents on the Iseq index yesterday. It is also 47 per cent higher than Aer Lingus’s average closing price over the last six months, according to Ryanair.
Minister for Transport Leo Varadkar previously indicated that the Government would not dispose of its stake for less than €1 per share.
Ryanair had earlier ruled out making a third bid for the company, after its first €2.80 per share bid and the €1.40 per share bid it made in January 2009 were both rejected by shareholders.
Mr O’Leary also told shareholders at the company’s agm in September 2011 that the airline would not bid for the Government’s 25 per cent stake “if they think a bid from Ryanair would be unhelpful”. Yesterday Ryanair said the disbanding in 2010 of Aer Lingus’s employee share ownership trust, which controlled 15 per cent of the shares, would make it easier to gain the support of 50 per cent of shareholders, with or without the Government’s backing.
However, it said it hoped that the Government would support the offer.