Ryanair Holdings made the decree on Tuesday to sell its 29% stake in Aer Lingus in the event of an “agreed takeover” of the Irish airline. This was said in response to the UK’s antitrust regulator’s request that Ryanair reduce its holdings in Aer Lingus so as to avoid stifling competition and the prevention of a sale of Aer Lingus.
In a report from The Wall Street Journal, Ryanair is quoted as saying that it would “unconditionally sell its 29% shareholding to any other [European Union] airline that makes an offer for Aer Lingus and obtains acceptances from 50.1% of Aer Lingus shareholders."
Even with this pledge, however, it is unlikely that the UK regulator will accept this proposal. Considering that a “rival airline could only acquire a 50.1% Aer Lingus stake if existing shareholders other than Ryanair sold their shares.”
The other shareholders in Aer Lingus are the Irish Government at 25% and Etihad Airways with 3%. With Ryanair’s 29% holding, the largest of the independent shareholders, the UK’s Competition Commission could make the argument that “while Ryanair's stake does not prevent an alternative EU airline from gaining majority control it could prevent it from obtaining a strategic stake.”
The commission will conclude its investigation into the matter by September 5 and industry experts expect that its findings will determine that Ryanair’s Aer Lingus stake is anticompetitive. If this proves to be the case, Ryanair can appeal this decision at the Competition Appeal Tribunal in London.
The airline is currently appealing a decision made by the regulator to block its 906.4 million (694m euros) takeover offer for Aer Lingus. The proposal was swatted down by the European Commission, an antitrust watchdog for the EU.