Aer Lingus board set to recommend IAG offer
Statement expected to recommend that shareholders - including Government and Ryanair - accept €1.36bn bid
The Aer Lingus board is due to recommend in the morning that shareholders - including the Government and Ryanair - accept IAG’s €1.36bn bid for the airline
IAG proposed paying €2.55 a-share, made up of €2.50 cash and a five cent dividend, when it made a third approach to the Aer Lingus board at the weekend.
The board is expected to recommend that shareholders, including the Government and Ryanair, which between them control 54.9 per cent, accept the bid.
IAG’s bid is conditional on the two big shareholders accepting it, which means that the transaction will not go ahead should either reject it.
Both have played their cards close to their chests since IAG first approached Aer Lingus in December.
The Government, through Minister for Finance, Michael Noonan, is responsible for the State’s 25.1 per cent holding in the airline.
The Minister for Transport, Tourism and Sport, Paschal Donohoe, said that the coalition will consider both an offer’s value to the taxpayer and the likely impct of a take over on international access to the Republic.
The Dáil has to approve any sale of the State’s holding. The Government will have to overcome disquiet about a sale from within its own ranks along with strong objections from the opposition.
Ryanair chief executive, Michael O’Leary said recently that his company’s board will consider any offer carefully before decding whether or not to part with its 29.8 per cent holding in its rival.
Institutional investors, which hold an estimated 20 per cent-plus of the company are likely to accept any offer over €2.50 a-share, although some have pushed for €2.60 or more.
Any proposed deal will have to go to EU competition regulators, who could take up to two months to make a decision on whether to allow it.
It is thought that the Government is unlikely to make its decision until it knows the views of Brussels officials.
The coalition is already under fire from opposition deputies and local interest groups who fear that the sale of Aer Lingus will result in the loss of some of its Heathrow landing rights, seen as vital to exporters and tourism.
IAG and its chief executive, Irish man Willie Walsh, will have to convince the administration that his group’s plans for the airline tie in with the public interest and aviation policy.
Industry observers argue that IAG is more likely to promot the Heathrow links with the Republic’s three State-owned airports, Cork, Dublin and Shannon, than use them for other routes.
The group is also said to be lured by the fact that Dublin Airport offers further scope for growth on transatlantic routes, something that Heathrow cannot offer as it is running at full capacity.
Mr Walsh is a former Aer Lingus chief executive and was one of the airline’s pilots.