Minister for Finance Brian Cowen strongly defended the Government's part-privatisation of Aer Lingus and insisted there were "many obstacles" in the way of a Ryanair takeover of the national airline.
As he faced a barrage of Opposition criticism about the takeover bid led by Ryanair chief executive Michael O'Leary, Mr Cowen pointed out that the State retained a 28.3 per cent shareholding.
"A shareholding of 25.1 per cent ensures that another company cannot acquire the 75 per cent threshold required to force delisting," he told the Dáil.
There was also a question over whether jurisdiction for merger clearance rested with the European Commission or Ireland "and it is expected that jurisdiction will lie with the European Commission", Mr Cowen added.
Labour leader Pat Rabbitte, who described the Aer Lingus sale as the Government's "second botched privatisation", asked "why you reduced your shareholding by 7 per cent from 35 per cent to 28 per cent, thus facilitating what is now under way? What is the explanation for that?"
He pointed out that "a sum of €30 million of taxpayers' money was spent on advisers".
The Minister insisted, however, that "the IPO was a successful floating of the equity by the State. It went well and was held up by the market as such."
Mr Cowen also said that a shareholding of 25.1 per cent "means the company's memorandum and articles of association cannot be changed without the State's agreement. Maintaining this level of shareholding was designed, among other things, to frustrate any hostile takeover attempt. Even if another company buys a majority share, Aer Lingus will continue to operate on an independent financial basis."
Socialist Party TD Joe Higgins (Dublin West) said, however, that "if this privatisation was a success, why are the shares now being sold at €3.05 when the Government sold them for €2.20".
Mr Higgins asked how Mr Cowen could "have the audacity, the shamelessness to read a script that was probably prepared by stock exchange sharks in New York to cover or justify the massive incompetence of which this Government is guilty".
The Socialist Party TD claimed the Minister was "crying 'foul' at Ryanair's attempt when he must have known from the beginning that the law of the stock exchange is that the shark with the biggest snout goes in for the kill, and so it has. Did his advisers tell him this was possible and if so, why did he not take pre-emptive action? We want a clear answer to that. If they did not, why were they paid tens of millions of euro?"
Mr Higgins also highlighted the "trauma caused to Aer Lingus workers by this privatisation".
He said that whether Mr O'Leary "takes full control or not, the Minister has allowed a cuckoo into the Aer Lingus nest. That cuckoo will use whatever shareholding he has to drive bargains with the Government in the interest of Ryanair, to get conditions for the development of Dublin airport and the Irish Aviation Authority to suit the profits of his shareholders."
Mr Cowen said, however, that under State ownership Aer Lingus and other companies had suffered job losses, so maintaining State ownership was no guarantee of job security.
"The Opposition presumes that a successful takeover of Aer Lingus by Ryanair is imminent. That is not the position. In relation to the retention of strategic shareholding by the Government, we are in a position to protect the strategic concerns in the national interest in respect of Aer Lingus," Mr Cowen said.
