The staff shareholding group at Aer Lingus and several third parties are preparing to block Ryanair's €1.4 billion takeover bid for the airline, writes Emmet Oliver
The body which holds the shares on behalf of staff, the Employee Share Ownership Trust (ESOT), has discussed various mechanisms to finance an additional purchase of shares. Putting its existing shares up as security for a loan has been discussed by trustees of the ESOT.
If the ESOT and other staff shareholders manage to increase their stake by a few percentage points and they form a loose alliance with one other substantial shareholder, the chances of Ryanair chief executive Michael O'Leary getting beyond the key figure of 50 per cent would seriously diminish.
One source who is advising the opponents of the Ryanair bid said: "Every share that is taken off the table puts another dent in the Ryanair attempt to get control."
Ryanair currently has a 19.2 per cent stake; the ESOT and other staff shareholders have 14.9 per cent; while the Government has 28 per cent; the remaining shares are held by institutions and wealthy individuals.
Aer Lingus has asked a sub-committee of its board to frame a strategy to deal with the Ryanair offer. The former chief executive of Anglo Irish Bank, Seán Fitzpatrick, and solicitor Ivor Fitzpatrick are members of this committee.
It is understood several third party investors, some with existing investments in the airline industry, have contacted advisers to Aer Lingus in recent days signalling their intention to buy shares. Several high-net worth individuals have also spoken to union representatives about buying a stake. Announcements from some of these parties may come this week.
It is understood that the third parties are involved in aviation in the UK and US and are anxious to stop Ryanair getting involved for the first time in long haul services, particularly on the transatlantic route. A senior source said: "This story has increasing international significance. There is a strong view that allowing Ryanair's bid to advance would see low-cost carriers moving into long haul aviation for the first time."
Opponents of the Ryanair bid believe that if the ESOT and other staff shareholders can increase their stake beyond 14.9 per cent and another third party can buy a stake of about 6 per cent that could represent a substantial block on further progress by Ryanair.
However, if Ryanair returns with an improved offer of more than its current €2.80 this could change the calculations. While Mr O'Leary believes the ESOT will consider his offer, a statement issued at the weekend by the airline's Central Representative Council, which is made up of staff and management representatives, stressed the importance of competition in the sector.
Meanwhile, Fine Gael MEP Gay Mitchell said he would be raising the takeover offer with the competition authorities in the EU.