Ryanair has submitted a formal bid of €694 million for Aer Lingus after saying last month it would resume a pursuit of its Irish rival.
Under takeover panel rules, Ryanair had to submit that offer to shareholders today. It is understood the Government has 60 days to respond to the offer.
Ryanair, which owns 29.8 per cent of Aer Lingus, offered to buy remaining stock for €1.30 a share in cash.
Ryanair says its chances of clearing competition hurdles had been boosted by mergers among other European carriers, falling traffic in Dublin that leaves room for new entrants and Government plans to auction the 25 per cent stake it holds in Aer Lingus.
"In six years as a public company, Aer Lingus has failed to deliver value," Ryanair chief executive officer Michael O'Leary claimed in a letter accompanying the bid document.
Aer Lingus traded 1.4 per cent higher at €1.07 at 10:52am in Dublin, where both carriers are based, taking the gain this year to 69 per cent.
That's still 23 cents below the offer price and values the carrier at €568 million. Ryanair, which built its stake in 2006 and 2007 and is making the new bid via wholly-owned subsidiary Coinside Ltd, was little changed at €4.14.
The company has a market value of €5.96 billion and has advanced 14 per cent this year.
Mr O'Leary pledged to lift Aer Lingus's annual passenger total to 14 million over five years from 9.5 million today and said his company would invest in expanding transatlantic flights.
In addition to the bid price, investors would also get a dividend of 3 cents a share announced by Aer Lingus on May 4th that they're due to receive on July 31st.
European Union regulators blocked Ryanair's bid for Aer Lingus in 2007, saying a takeover would allow the discount airline to dominate 35 routes and control 80 per cent of the market in Dublin.
Ryanair lost a 2010 appeal of the merger ban. Ryanair is also facing a full investigation by the UK's Competition Commission of its holding in the smaller carrier after the national regulator said it may lead to higher prices.
Bloomberg