Ryanair's €1.4 billion bid to take control of Aer Lingus was dealt a fatal blow yesterday when the staff shareholding voted against the offer by an overwhelming majority.
Michael O'Leary, meanwhile, has made a gain of €24 million from the sale of shares in Ryanair, leaving him with a 4.2 per cent stake. He sold 2.5 million shares in the airline on Tuesday and the transaction was officially declared yesterday.
In terms of individuals, rather than institutions, Mr O'Leary remains the largest shareholder in Ryanair. The reason for the sale, at this time, was not given.
Mr O'Leary had admitted on several occasions that if the Employee Share Ownership Trust (Esot) voted against the deal, Ryanair's attempts to get majority control of Aer Lingus would effectively be over. This is what happened yesterday when 97 per cent of Esot votes rejected the Ryanair offer. There was a turnout of 70 per cent.
The only way Ryanair can increase its offer now is if a competing offer is lodged by another company or group of wealthy investors. If the Ryanair offer lapses next month - as many expect it will - the airline will have to wait another 12 months before making another full takeover bid.
Unions Siptu and Impact both welcomed the Esot result. Impact said workers were clearly indicating they did not want Mr O'Leary as boss of Aer Lingus "at any price".
While Ryanair will not be able to get majority control of Aer Lingus it will retain a strong position with a 19.2 per cent stake. Mr O'Leary or his representatives are likely to attend annual general meetings of Aer Lingus and could oppose major strategic decisions of the company.
The area of aircraft, for example, is likely to be a major source of tensions. Ryanair believes Aer Lingus management is going to end up with "expensive aircraft for many years". Ryanair claims that a "lack of scale" will give Aer Lingus a very weak hand when it comes to negotiating with Airbus and Boeing.
Ryanair this week also claimed that Aer Lingus was already leaving certain routes because of the competitive climate in European aviation, including Bristol and Valencia.
Aer Lingus is now left with an eclectic range of shareholders, from pilots to Ryanair to Denis O'Brien to the Government. Analysts question whether all these shareholders can move in an agreed direction.
While, theoretically, another investor could come forward and seek to build a stake in Aer Lingus, the presence of Ryanair on the share register makes this less likely.