Shares in Aer Lingus rose sharply in early trading on the Dublin Stock Exchange on Wednesday morning – after Ryanair boss Michael O’Leary made a bid to buy Ireland’s national airline.
Budget carrier boss O’Leary has offered a near one billion dollar cheque for the shares in Aer Lingus not already owned by Ryanair.
The new offer places the $1billion valuation on Aer Lingus with O’Leary even claiming the sale would help the Irish government meet some of the conditions of the EU bail-out.
The surprise cash offer was made just 24 hours after Britain’s competition commission began a full investigation into Ryanair’s 29.8% holding in Aer Lingus according to the Irish Examiner.
The paper reports that Ryanair has offered €1.30 per share, slightly less than the €1.40 per share offered in a 2008 takeover bid.
Making the offer, Ryanair chief executive O’Leary said it represents good value for Aer Lingus’s shareholders and would keep the airline Irish.
“We believe that Ryanair’s offer of €1.30 now offers Aer Lingus’s long-suffering shareholders a real and meaningful return which represents a 38.3% premium to its closing price of €0.94 on Tuesday, 19 June, 2012,” said O’Leary.
“It allows the Irish Government to deliver the first of its assets sale obligations to the troika, and it enables Aer Lingus to secure a financially strong, Irish-based, airline partner committed to keeping Aer Lingus as a separate airline while developing the Aer Lingus brand and business.”
An Aer Lingus spokesman acknowledged the offer but said the carrier would not be making any comment.
The new bid will be scrutinised by the European Commission which has already investigated a 2007 Ryanair bid for Aer Lingus and decided to block it in Jun 2007.
O’Leary says Ryanair is willing to address any concerns held by the commission prior to completing a bid.
“The increase in capacity at Dublin Airport, the consolidation of airlines across Europe, and the
Government’s commitment to the troika to sell its stake in Aer Lingus have resulted in a different set of circumstances,” said a Ryanair statement.
“The most significant development was the consolidation of the two largest airlines operating out of Heathrow. The green light for IAG’s (BA and Iberia) takeover of BMI paves the way for Ryanair to attempt a similar move in acquiring Aer Lingus.”
Shares in Aer Lingus rose on Wednesday morning but NCB Stockbrokers analyst Brian Devine told the Irish Examiner that the takeover deal is unlikely to be approved.
“It is very hard to see how it would be accepted by European competition authorities,” said Devine.
Ireland’s Transport Minister Leo Varadkar said his Government would have to study the offer before making any comment.
Fianna Fáil transport spokesman Timmy Dooley said his party is opposed to the Ryanair bid and urged the Government to prevent it.
“The existence of Ryanair and Aer Lingus as separate competing entities has transformed our tourism and business connectivity,” said Dooley.
“Any material change to the separate status of these airlines would inevitably lead to reduced competition, increased fares and less choice.”
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Switch to the desktop site to post a comment.aloistmartin | Jun 21, 2012, 05:26 PM EDT
Occupy Aerfort Bhaile Átha Cliath !
JBRAFTREE | Jun 21, 2012, 10:58 AM EDT
MaryS, thanks for the 411, but it still doesn't answer the question,(I'm not a bus person.), when are planes going to go non-stop from Chgo to Shannon?
jedswims | Jun 20, 2012, 08:32 PM EDT
at least ryanair will now be charging for us to use CLEAN restrooms while in flight...
pilib04 | Jun 20, 2012, 07:37 PM EDT
Rarely use Aer Lingus, but I depend on Ryan Air. I am more than willing to let O'Leary have a chance at operating Aer Lingus.
seanomelb | Jun 20, 2012, 07:11 PM EDT
O'Leary is making a genuine bid for AL and the idiots below (bythebay and his ilk)have no concept of commercial transactions.Love him or loathe him the government could use the money.Europe should butt out they cannot expect Ireland to garner more money to ease the debt burden.In other words they cannot have their cake and eat it.
mary.swanton | Jun 20, 2012, 05:58 PM EDT
So O leary loves free advertising and pulls publicity stunts all the time. Hes arrogant and herds people onto planes BUT he also runs a service that is affordable and Ryan Air seems to be doing well! Its irrelevant as to who tackles the airline.So frustrating that the costs are enormous. You can pick your seat on most flights because the planes are half empty, yet you still pay outrageous fares. Anyone that can bring the price down and offers to buy out Aer Lingus should be given credit as it gives opportunity to highlight once again that Aer Lingus has simply out priced itself and seriously needs to be sold! Anyone 18, 20 or older living in the USA knows that!
Bythebay | Jun 20, 2012, 03:58 PM EDT
the airline lost the run of itself years ago. Overpriced, overpaid and thoroughly useless.
irishpjk | Jun 20, 2012, 03:12 PM EDT
wtf I fly the north Atlantic to Ireland on a Fairley regular basis. Aer Lingus is my last choice, costs more, poor service, back toilets and galley closed for crew comfort. Want water get it yourself by door number two, tray of food thrown at you if you ask for a drink with it, you will be told you should have got it when the bar car passed. It is going downhill and fast sell it now before it goes broke and drags the whole country down with it. No matter who buys it things cannot get worse
GabrlOSullivan | Jun 20, 2012, 01:41 PM EDT
Well . . . there goes the airline.
connemaragirl | Jun 20, 2012, 12:47 PM EDT
LoyalCitizen I wonder if that's all it is,I wouldn't put it past him ,he's good at getting free advertising .Mary Swanton is right about the bus from Dublin to Galway it is 15 euro's I took it myself unless it went up since then ,I think its great,just pick up your luggage and walk across the parking lot and off you go,meet your family in Galway .No need to get your family out of bed at the crack of dawn to pick you up in Dublin .
aoibhinn | Jun 20, 2012, 12:33 PM EDT
LoyalCitizen, you got that right, it's just wishful thinking and free publicity all the time! mary.swanton, sorry, but you don't know what you're talking about. Are you 18? 20?
mary.swanton | Jun 20, 2012, 12:13 PM EDT
bus service from dublin airport to major cities is very reasonable. Many private buses running services for $15euro one way to galway...try gobus.ie buses are comfortable and roads are great!
JBRAFTREE | Jun 20, 2012, 11:29 AM EDT
OK, Swell!! but will we ever, ever, see an Irish Carrier go from Chicago to Shannon nonstop as they did before???? Or, for that matter, any other carrier. It costs a whole lotta Euro to go from Dublin to Galway!!
bob40wil | Jun 20, 2012, 11:24 AM EDT
With O'Leary running things you'll fly from the States to Ireland standing up, no restrooms or maybe one...for a price.
irishtxn | Jun 20, 2012, 10:58 AM EDT
As an American, I'm wondering if they expand into the Southern States like Texas?
mary.swanton | Jun 20, 2012, 10:55 AM EDT
This deal may be a life saver for USA tourism in Ireland. Aer Lingus North American Route is without a doubt the biggest barrier for the Irish in the North East USA who want to visit frequntly. Many of us seldom go further than the Aer Lingus website! One click of the mouse and plans for a visit are squashed when cost is revealed. Perhaps O Leary will see how lucrative the trans atlantic route actually is with lowered rates. Ryan Air may actually make the planned 2013 Gathering initiative very successful. Many Irish here are hoping for an Aer Lingus buyout in the hope of reasonable access to Ireland. Best of Luck Mr. O Leary! We don't need fancy drinks and meals on trays...sandwiches in the biscuit tin and the flask of tea are just fine to tied me over the Atlantic! Time to have an airline that can get us there as opposed to the one that's keeping us here!
seagreen | Jun 20, 2012, 10:51 AM EDT
The "Gasbag" is at it again
LoyalCitizen | Jun 20, 2012, 10:37 AM EDT
More free publicity for Ryan Air from Irish News Media...............I wonder do Irish Media realise that their are other companies in the world who could do with free publicity.