Ryanair chief executive, Michael O'Leary, has rejected claims by the UK competition regulator that its 29.8 per cent stake in Aer Lingus could block International Consolidated Airlines' Group's (IAG) bid for the Irish flag carrier.
Mr O'Leary made his remarks as Ryanair is preparing for a second, long drawn out legal battle with the UK Competition and Markets Authority (CMA) over the company's stake in Aer Lingus.
The CMA confirmed yesterday that it will not change its 2013 ruling that Ryanair cut the holding to 5 per cent in light of IAG’s €1.4 billion offer for Aer Lingus and published a final order demanding that the company comply with the finding.
Ryanair immediately said that it would challenge this ruling in a move that will set off a second round of litigation between it and the UK regulator. The airline is already seeking to appeal the original 2013 decision to the British supreme court, having unsuccessfully sought to have that verdict overturned by a tribunal and a lower court.
The challenge it announced yesterday is separate to those proceedings but will follow the same path, going first to the UK Competition Appeals Tribunal and the British courts.
Ryanair asked the CMA to review the 2013 decision in February on the basis that the IAG bid contradicted the authority’s original finding that the airline’s 29.8 per cent stake deterred potential takeover offers for its rival.
Simon Polito, who is chairing the Ryanair/Aer Lingus inquiry said IAG's bid depends on it securing Ryanair's agreement to sell its shareholding. "This recent development illustrates that Ryanair can decide whether a bid for its major competitor on UK/Irish routes succeeds or fails," he added.
However, Mr O’Leary called on him to withdraw his claim that a “30 per cent shareholder can block a takeover bid or decide whether any takeover offer is successful or otherwise”.
In a statement, Ryanair pointed out that the IAG offer has already won acceptances from the Government and Gulf airline, Etihad, who between them own 30 per cent of Aer Lingus.
It argued that if IAG receives 50.1 per cent acceptances, Ryanair can do nothing to prevent it getting control of Aer Lingus.
Ryanair has not yet said whether it will accept IAG’s €2.55 a-share offer for its Aer Lingus stake, which values it at more than €400 million. It repeated yesterday that its board will consider such an offer when it is received.
As it has issued a final order to Ryanair to reduce its Aer Lingus stake, the CMA has given the Irish company five working days to nominate a divestment trustee to oversee the sale of the shares. However, this is likely to be put back as the airline proceeds with its second appeal.