Ryanair launches another takeover bid for Aer Lingus

[pete]

Irish Times

Ryanair has launched a second bid to purchase Aer Lingus in an offer that values the carrier at €748 million, or approximately half the value of its first bid.

The €1.40 a share cash bid represents a premium of around 28 per cent over the average closing price of Aer Lingus shares for the 30 days to November 28th, 2008.

Current share ownership:
Ryanair 30%
Government 25%
ESOT 14.2%

Looks like that means Ryanair have to get 21% more sharesholders for a majority with 30% not held by government or staff.

Don't think deal would be good for Irish consumers as they would have up to 80% of flights leaving Ireland. On the other hand Aer Lingus can't survive on its own & only a matter of time before there is a takeover.

[Macy]

Don't think deal would be good for Irish consumers as they would have up to 80% of flights leaving Ireland. On the other hand Aer Lingus can't survive on its own & only a matter of time before there is a takeover.

An ideologically driven privatisation leaves the consumer and state in a worse position - who'd have thunk it?

[OneRedArmy]

Real dilemma for Government which was entirely forseeable at the time of privatisation but ignored.

Their options are:
1) Allow a Ryanair takeover (requires EU competitions authority to change previous decision)
2) Allow a foreign takeover, probably by someone like Lufthansa (Heathrow slots will be raided and used elsewhere and Aer Lingus will be significantly downsized).
3) Let AL suffer a slow and painful death as nobody will touch them if they can't have the Heathrow slots.

Re-nationalisation is no longer an option as the Government doesn't have the money and will soon be borrowed up to the hilt.

Option 2 is really the only course of action.

[Newryrep]

Is there not a market for an AL type operator who is somewhere inbetween the budget airline ala Ryanair and the former national carriers of Lufthansa and Air France, BA etc.

I personnally dont mind spending a bit more for the more convienent times/airports etc and outside of the budget airlines it appears to be the only 'national carrier' where you can get an anyway decent one way price - especially convienent for double headers.

I say this with no particular emotional attachment to AL , no ones want to return to the old days of flights costing an arm and a leg but flying budget nowadays can be soul destroying.

If they streamlined can they not return to profitability, they have the cash reserves to purchase new planes ?

[Macy]

Re-nationalisation is no longer an option as the Government doesn't have the money and will soon be borrowed up to the hilt.

I agree that horse has bolted for Aer Lingus. Apart from the banks, the real long term beneficial (for the state) nationalisation would be eircom/ our telecoms infrastructure.

[pete]

2) Allow a foreign takeover, probably by someone like Lufthansa (Heathrow slots will be raided and used elsewhere and Aer Lingus will be significantly downsized).

I would guess there must have been attempts to get this to happen at least unofficially. It would also have to be a majority shareholding sale as no one will be interested in minority share.

Is there some rule about transatlantic flights that AL has to remain in Irish ownership or maybe EU? Something to do with US security issues?

I can see shareholders accepting this deal but will the EU allow it?

[pete]

Irish Times: Board rejects takeover

Aer Lingus has rejected Ryanair’s €748 million takeover bid for the airline, saying the offer significantly undervalued the carrier.

In a statement this evening, the Aer Lingus board said it had considered Ryanair’s renewed €1.40 a share cash bid for the airline but was strongly advising shareholders against the offer.

The Ryanair bid represents a premium of around 28 per cent over the average closing price of Aer Lingus shares for the 30 days to November 28th.

That was quick. Whether it is good for competition or not isn't the concern of the board so strange they rejecting 28% permium on share price so quickly when they losing money.

[pete]

Ryanair on the attack this week with full page adverts in the broadsheets publishing letters they sent to the Aer Lingus board.

Irish Times

The chief executive and chief financial officer of Aer Lingus have this evening requested that a controversial clause recently inserted into their contracts be removed "to prevent the issue becoming a needless distraction" and in order to focus on defeating the hostile Ryanair bid for the company.

Under the clause, Mr Mannion stood to gain up to €2.8 million if the former State airline was taken over

They make it sound like someone else inserted the clause into their contracts against their will.

Its not often you have both the Minister of Transport & ICTU agreeing with Michael O'Leary.

[dahamsta]

Christ I hope it doesn't happen. I've happily avoided flying Ryanair since... well, forever, and enjoyed flying Aer Lingus even more for it.

I won't be able to leave the damned country if O'Leary gets his scumbag mitts on it.