Ryanair, an Ireland-based low cost airline, is attempting to acquire its Irish rival airline, Aer Lingus, by offering a bid of €694 million.
The airline currently owns a 29.8 percent interest in Aer Lingus, and its new offer is 38 percent higher than the Aer Lingus share price of €0.94 per share, as at the close of trading on June 19, 2012.
Back in 2006, Ryanair made a bid for Aer Lingus, but could not make more headway because the European Commission then banned the bid in 2007.
Michael O’Leary, the chief executive officer of Ryanair, said, ‘This offer represents a significant opportunity to combine Aer Lingus with Ryanair, to form one strong Irish airline group capable of competing with Europe’s other major airline groups led by Air France, British Airways and Lufthansa. Since the European Commission recently approved BA’s takeover of British Midland (being the latest in a series of EU airline consolidations), and Etihad recently invested in Aer Lingus and there are reports that it has a ‘strong interest’ to acquire the Government’s stake, and since the Irish Government has decided to sell this stake, we believe now is the time to focus on the right long-term strategic partner for Aer Lingus.’
In a separate statement, Aer Lingus said that the company feels that in view of its earlier bids for acquisition, Ryanair’s offer may not even be permitted, and even if it is permitted, the offer still significantly undervalues the company.
Aer Lingus added, ‘The board of Aer Lingus Group notes the announcement by Ryanair Holdings of its intention to make a third unsolicited offer for 100 percent of the entire issued and to be issued share capital of Aer Lingus. Aer Lingus will make a statement in due course. In the meantime, Aer Lingus shareholders are urged to take no action.’
