Market reaction:The long-awaited, and by now expected, news that the European Commission has blocked Ryanair's planned takeover of Aer Lingus did little to affect the former State airline's share price yesterday.

The stock did in fact end the day down 2.7 per cent, or seven cent, at €2.55, though volume was very light, with only 241,000 shares changing hands - about half the daily average.

Analysts were not surprised, saying that the ruling meant little to the stock as the news had already been priced in. One analyst said the only trading likely to have taken place yesterday was by hedge funds taking the opportunity to exit the stock now that it is no longer a takeover target. Several funds are known for buying into stocks that are targets.

What may affect the share price, however, is the news that Ryanair will not be forced to sell its 25.2 per cent stake in Aer Lingus.

"There had been considerable concern in the market that this would lead to a large overhang in the stock," said one Dublin analyst, adding that this had been weighing on the price recently.

Still, if Ryanair holds on to the stock, it could also cause problems for Aer Lingus, particularly given the fact that the Government has a 25.4 per cent stake in the airline. Analysts were quick to point out that, with these two large stakeholders, and a near 15 per cent holding by the Employee Share Ownership Trust (Esot), the number of shares available in the open market is small, a fact that could deter some investors.

As for the current price, analysts were in agreement that, at €2.55, Aer Lingus is trading at a reasonable discount to other European flag carrier airlines.

Whether it is worth a punt, however, cannot really be answered until it releases its next set of results.