Aer Lingus approached for sale by Middle Eastern airline Ethiad
Ethiad approches Irish government
The Middle East’s fastest-growing airline, Etihad, has approached the Irish government to buy its 25% stake in flag-carrier Aer Lingus, according to The Financial Times. The approach comes after debt-laden Ireland said in September it would sell its stake in Aer Lingus.
Transport Minister Leo Varadkar said that he would not sell it for less than €1 per share, which would value the stake at €132.4 million and the full airline at €529.6 million.
But last weekend the airline was valued at less on the markets -- shares at €0.64, putting the airline at €338.94 million and the government stake at €84.7 million.
According to the FT, it was unclear how far talks have progressed and they might not result in any deal. Etihad and the Irish government declined to comment.
Aviation industry experts believe that the most likely buyer of the airline is International Airlines Group, the parent company of British Airways.
James Hogan, Etihad chief executive, met Taoiseach (Prime Minister) Enda Kenny the weekend before last at an investment event in Dublin, the Global Irish Economic Forum.
An Irish government report in June recommended selling Aer Lingus along with ports and power stations as part of plans to raise €5 billion to repair Ireland’s accounts.
One potential stumbling block to the sale of the Aer Lingus stake is the large deficit in a pension scheme of which the company is a sponsoring employer. The deficit was estimated to be €400 million last year, and a new actuarial valuation is due by December.
Christoph Mueller, Aer Lingus chief executive, has said he welcomed a possible ownership change at the company.
Ryanair, which has just under 30% of Aer Lingus, ruled itself out of a bid, having failed twice to take over the national carrier because of objections by the Irish government and European competition authorities.
Meanwhile, in another development, Ryanair has snubbed an approach from representatives of British soccer Premier League champions Manchester United, who were seeking to sell the low-cost airline a massive shirt sponsorship deal.
It is believed that Manchester United agents contacted Ryanair about the deal when former sponsor U.S. insurance firm AIG imploded. AIG was replaced as shirt sponsor by Aon last year at the start of the 2010/11 season.
Ryanair was offered the shirt sponsorship for “around €25 million” according to chief executive Michael O’Leary.
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