An Aer Lingus takeover remains on Ryanair's radar screen despite resistance from the flag carrier's employees and shareholders.
Chief executive Michael O'Leary says he will make a new offer for Aer Lingus if the European Commission (EC) approves the proposed takeover. O'Leary expects the EC to make a final decision on the proposal by early May. He says Ryanair is "co-operating with the EC on the investigation" and "if we get clearance we'll make another offer".
But securing approval from the EC could be difficult. In launching the detailed investigation in December the EC said the proposed takeover "would raise serious competition concerns in the passenger air transport sector and in particular could reduce choice for consumers and could give rise to higher fares than would be likely if the two carriers remained separate".
Aer Lingus is urging its shareholders to reject any Ryanair takeover attempt |
Ryanair also has to win over the carrier's employees. The Aer Lingus Employee Share Ownership Trust, which holds 13% of Aer Lingus' shares, overwhelmingly voted against the takeover bid in late November. The union, which represents Aer Lingus cabin crew, pilots and middle-level managers, also has overwhelmingly rejected the bid.
O'Leary acknowledges Ryanair faces hard negotiations with unions before it can complete a deal but says: "We can't do anything until the EU competition authorities clear us."
Ryanair first launched in October a €2.80 ($3.70) per share offer which values Aer Lingus at about €1.5 billion. It first gave shareholders until late November to approve the bid but after failing to secure approval it extended the deadline twice. With shareholders still reluctant to approve the bid, bowing to a plea from Aer Lingus board of directors to reject it on the basis that its "ill-conceived, contradictory and anti-competitive", Ryanair let the original offer expire just before Christmas.
If it makes a new bid, Ryanair will ultimately need approval from about a quarter of Aer Lingus' other shareholders. Ryanair now owns about a 19% stake in publicly traded Aer Lingus. O'Leary says Ryanair could "theoretically" buy more shares but would not comment about this possibility.
Source: Airline Business
