The €1.4 billion Ryanair bid for Aer Lingus is facing opposition from almost 50 per cent of the Aer Lingus shareholder base for the first time.
An alliance of pilots, pilot pensioners, Denis O'Brien, the Government, individual staff shareholders and the Employee Share Ownership Trust (Esot) are now effectively blocking the bid, which is currently priced at €2.80 a share.
Yesterday a group of pilots, called Tailwind Nominees, confirmed to the stock exchange that they had purchased 6.1 million shares at €2.90 a share. They now claim to have a 1.6 per cent stake.
While all members of this group claim they are not acting in concert, they have effectively made the chances of Ryanair acquiring over 50 per cent of the airline's equity remote, if not impossible. The group has about 46 per cent of the shares.
The Aer Lingus shareholders' register indicates that a significant portion of the remaining shares are held by retail investors, many of them buying as part of a family investment. If a portion of these and possibly one or two institutions fail to accept the Ryanair bid, it would have a remote chance of success.
Michael O'Leary this week said he accepted that if the Employee Share Ownership Trust failed to back the bid it was unlikely to succeed. The Esot is not expected to give its definitive view on the bid this week - its advisers are currently studying the offer document.
Shareholders have until November 13th to accept the Ryanair offer. It is understood the Esot will ballot on the offer, most likely by post. The trustees of the Esot can also make a recommendation on the offer.
If the offer lapses, as looks increasingly likely, the share price could fall back and that would leave a substantial number of shareholders nursing losses, at least in the short term.
However, there may be a respite for the shares if US and EU negotiators can agree an open skies deal over the next few months. This is unlikely to happen until after the US mid-term elections. Analysts in Ireland, Britain and Europe have identified an open skies deal as the main driver of the Aer Lingus share prices for the future.
Meanwhile, there are increasing signs that the boundaries between low-cost carriers and traditional flag carriers are being blurred with US airline JetBlue announcing plans yesterday to start code-sharing with international carriers.
JetBlue said it was in talks with "large international carriers" to cross-sell seats for services from its base at New York's JFK airport. Dave Neeleman, chief executive, said the partners would be announced in the coming months, in a move that will increase pressure on Delta Air Lines, which is expanding its domestic network from JFK to feed its own international routes. JetBlue is constructing its own terminal at the airport. - (Additional reporting by Financial Times service)
