Unions representing workers at Aer Lingus today rejected guarantees given by Ryanair to maintain their representation as part of its €748 million bid for the former state airline.
Ryanair is trying to appeal directly to the government and employees, which own more than 25 per cent and 14 per cent of the carrier respectively, after Aer Lingus' board this week rejected the all-cash offer - for the second time in two years.
"The corporate culture of Ryanair is just something that is a complete anathema to our members," said Niall Shanahan, communications officer with the IMPACT union. "An approach from Ryanair, having been through this process already, is something instinctively they would want to reject."
The Employee Shareholder Ownership Trust (ESOT), which administers Aer Lingus employees' shareholdings and is a separate entity to the unions, is expected to meet on Monday to discuss Ryanair's bid, a source familiar with the matter told Reuters.
The Government has said it would wait until Ryanair tables a formal offer, expected within the next two weeks, before giving its opinion.
Ryanair already owns nearly 30 per cent of Aer Lingus and said yesterday it would recognise trade unions at the airline in contrast to its own company policy.
Ryanair said it would give the Government control over Aer Lingus' valuable landing slots at London Heathrow airport and restore the Shannon-Heathrow route.
"We already have union recognition in Aer Lingus, so (Ryanair Chief Executive) Michael O'Leary is not offering anything new or extra," a SIPTU union spokesman said.
Ryanair tried to buy Aer Lingus for double the price of its current bid in 2006 but was thwarted by the European Commission, which ruled it would create a near monopoly in European flights out of Dublin.
Employees and the government also rebuffed Ryanair's earlier offer for Aer Lingus in 2006 when the airline was privatised. It has made an all-cash offer of €1.40 per share this time.
Aer Lingus shares were trading 16.2 per cent higher at €1.57 in Dublin by 2.18pm, while Ryanair's shares were up 2. per cent at €3.02.
The two unions - IMPACT and SIPTU - represent the majority of workers including pilots, cabin crew and ground staff at Aer Lingus.
In 2006, 97 per cent of workers rejected the approach in a vote. Aer Lingus has been hit by a double whammy of recession and increasing competition from Ryanair.
NCB analyst Neil Glynn said the success of the bid would be largely dependent on the appetite of shareholders including the government and ESOT to sell their stakes and on Brussels' stance.
"We continue to see Ryanair's offer of €1.40 per share as undervaluing Aer Lingus's strategic value to it and expect that the offer price will have to be raised," Mr Glynn wrote in a research note.
Reuters