MINISTER FOR Transport Noel Dempsey briefed the Cabinet yesterday on Ryanair's latest offer for Aer Lingus.
It is understood that the Minister outlined the €748 million bid that has been tabled by Michael O'Leary. It is not clear if any opposition to such a deal was expressed by other Ministers.
Mr Dempsey has said he will not comment on Ryanair's latest proposal to merge with Aer Lingus until the full offer has been published. It is understood that Ryanair made "courtesy calls" to the relevant Ministers and their departments on Monday morning around the time that its bid for Aer Lingus was released to the stock market.
Mr O'Leary has asked to meet Mr Dempsey and Minister for Finance Brian Lenihan, but sources said no dates have yet been arranged for these meetings.
Mr O'Leary has also said he will meet Opposition parties.
It is not clear if any contact has yet been made by Mr Dempsey or Mr Lenihan with Aer Lingus's chief executive Dermot Mannion or chairman Colm Barrington. Mr Mannion was in London yesterday attending an air transport conference.
Aer Lingus's share price rose by more than 3 per cent yesterday to €1.32. This is 20 cent ahead of Aer Lingus's closing price last Friday, the last day of trading before Ryanair's bid emerged.
It is also just eight cent below the level at which Ryanair has pitched its bid and would seem to lessen the chances of Mr O'Leary current offer being successful.
Ryanair's share price, meanwhile, declined for the second day in a row. The shares closed in Dublin at €2.76, a fall of more than 1 per cent. Ryanair is expected to publish traffic statistics for November today, with analysts predicting a strong performance by the company on the back of heavy discounting of fares.
In a note to clients yesterday, analysts at Citigroup in London said Ryanair had a "higher chance of success" with its latest bid for Aer Lingus compared with its 2006 offer. "At a time when the Irish Government is facing budgetary constraints and Aer Lingus staff fear substantial job cuts, Ryanair is offering a total of €325 million cash . . . plus a doubling in size of its fleet . . . and the creation of 1,000 jobs over the next five years. These are difficult to ignore in the current environment when the alternative is downsizing."
But it added that regulatory clearance would be difficult to secure although the European Commission might pass the deal in the light of the current economic circumstances and the spate of mergers in the airline industry.
