Irish airline carrier Aer Lingus has advised its shareholders to reject Ryanair’s latest takeover bid.
The airline, which the Irish government has a 25 percent stake in, insists that the offer is not at the in the interest of Aer Lingus’ shareholders.
In a statement to shareholders published Friday, Aer Lingus said: “The board remains of the view that Ryanair’s offer is not in the interests of shareholders, fundamentally undervalues the business and, due to the scale and extent of the competition issues, is likely once more to be prohibited by the European Commission (EC). Accordingly, the board unanimously recommends shareholders take no action in relation to the offer.”
In June, Ryanair, Europe’s leading low-cost airline, offered to €694 million ($868 million) or €1.3 ($1.6) per share for the Irish airline, according to Reuters. The Michael O’Leary lead airline already owns 30 percent of the airline.
Aer Lingus said Ryanair had failed to publish proposed remedies to the competition concerns.
Ryanair justified the bid with a view to the creation of of one strong Irish airline group, capable of competing with Air France-KLM, easyJet, Lufthansa, and International Airlines Group.
Reuters reports both airlines do not expect to EU antitrust regulators to approve the bid when their official decision is made this coming Wednesday. If the bid is rejected the offer will move to a longer Phase 11 process, that could last for up to 105 days.
In 2007, the European Commission blocked Ryanair's first attempt to take over the airline on grounds it would lead to a monopoly of some 35 dominant routes.