THE BOARD of Aer Lingus yesterday rejected Ryanair’s €1.30-a-share offer for the company, saying it “undervalues” the airline. “Aer Lingus shareholders are accordingly advised to take no action in relation to the offer,” the company said.
It also questioned whether the deal was “capable of completion”, a reference to the regulatory hurdles Ryanair’s offer will face, primarily with the European Commission. The commission indicated yesterday any examination of a new Ryanair bid would start from scratch, with no reference to the rejection of Ryanair’s first bid in late 2006.
The UK Competition Commission is also investigating Ryanair’s 29.82 per cent holding in Aer Lingus, with the result the Michael O’Leary-led airline is prohibited from undertaking any further integration without the consent of the British body.
Ryanair’s bid helped to push up the value of Aer Lingus shares, which rose 15.4 per cent to €1.085 in Dublin yesterday. The shares had closed at 94 cent on Monday, just before Ryanair released details of its offer.
Aer Lingus chief executive Christoph Mueller postponed a planned monthly briefing with the consultative committee of the airline’s trade unions yesterday to deal with the Ryanair bid.
In its statement, Aer Lingus said it had delivered a “significantly improved” operational and financial performance since 2009, which had turned the company into a “robust, profitable airline” and achieved a turnaround in its operating performance of about €130 million since 2009. It also highlighted that it had more than €1 billion in cash on its balance sheet at the end of March.
Ryanair made no comment yesterday on the bid.
Taoiseach Enda Kenny told the Dáil the Government would have to consider a number of issues, including what was the best deal for the taxpayer and for the business. He said the Government was concerned about the dominance of a combined Ryanair-Aer Lingus entity in the Irish aviation market.
He said the Government would make its own decision on the matter and would not “be shoved into a fire sale”.
Fianna Fáil called for the bid to be blocked.
The trade union Impact urged the Government to refer the offer to competition authorities both in Ireland and in the EU. In a letter to Minister for Transport Leo Varadkar, Impact national secretary Matt Staunton said regulatory authorities “should and would rule that a Ryanair takeover of Aer Lingus would be uncompetitive”.
Impact represents 1,600 pilots and cabin crew at Aer Lingus.
Siptu called on the Government to block the offer. Its aviation organiser, Teresa Hannick, said it would be “madness for any government to put Mr O’Leary and Ryanair in control of our air links with the outside world”.
Michael Vaughan, president of the Irish Hotels Federation, said there would be “serious monopoly concerns around air transit into Ireland” if Ryanair were allowed to take control of Aer Lingus.
