THE GOVERNMENT has decided to adopt a wait and see approach to Ryanair’s latest offer for Aer Lingus, in which the State has a 25 per cent shareholding.
The Cabinet was briefed yesterday by Minister for Transport Leo Varadkar on Ryanair’s latest offer for Aer Lingus.
Ryanair’s bid was lodged on June 19th and it has 28 days to issue its formal bid document.
It is understood that the government will then have 60 days to respond to this offer.
No comment was available from Mr Varadkar after the Cabinet meeting.
However, sources indicated that the Government would use this time to weigh up the details of Ryanair’s €1.30-a-share offer for Aer Lingus.
It is also possible that a rival offer might emerge.
Earlier this year the Government said it would sell its Aer Lingus stake as it was no longer strategic. Mr Varadkar said he would want at least €1 a share for the stake.
Abu Dhabi-based airline Etihad has already indicated its interest in the Government’s stake and has separately acquired just under 3 per cent of Aer Lingus.
While the Coalition has not ruled out accepting Ryanair’s bid it is keen to find the right buyer for its shareholding.
It also wants to avoid a repeat of Eircom, where a succession of private sector owners earned healthy returns over the course of a decade after its sale by the State. This was achieved by selling prime assets, starving its network of investment and loading the telco with debt.
The Government wants to ensure that competition in the air travel market is not compromised, while maximising the return for the exchequer and potentially enhancing Ireland’s connectivity with other markets.
Any bid by Ryanair will also have to be approved by the European Commission. Ryanair chief Michael O’Leary travelled to Brussels last week to brief the commission on its latest offer.
The commission rejected Ryanair’s first bid for Aer Lingus in 2007 as being anti-competitive.
