Ryanair Repeats Bid for Aer Lingus

[No Smoking]

ATW Online: Tuesday June 19, 2012
Ryanair makes another takeover bid for Aer Lingus

Irish low-cost carrier (LCC) Ryanair (FR) has launched another takeover bid for Ireland’s national carrier Aer Lingus (EI).

In a statement issued Tuesday after European financial markets closed, FR said that Ryanair Holdings subsidiary, Coinside Ltd., was making an all-cash offer of €1.30 ($1.65) per share for EI, a premium of 38.3% over Tuesday’s closing price of €0.94. This values the Aer Lingus Group at €694 million ($877.8 million).

FR built up a 29.82% shareholding in the Irish flag-carrier from 2006 and has made two previously unsuccessful attempts to buy EI (ATW Daily News, July 7, 2010).

EI has long wanted FR to be forced to sell its shareholding and - as recently as a month ago - welcomed the outcome of a long-running legal wrangle in which the UK’s Office of Fair Trading was decreed to have the jurisdiction to investigate the allegedly anti-competitive effects of FR’s minority shareholding in EI. The status of that investigation, if FR succeeds in buying EI, was not immediately clear.

FR’s previous takeover attempts failed to gain sufficient shareholder acceptance and were ultimately blocked by the European Commission (EC) on competition grounds.

The Irish government, which holds a 25% stake in EI, has always opposed a sale to FR. The government now wishes to sell its stake to bolster its finances in the face of Ireland’s severe economic downturn (ATW Daily News, March 5).

In a statement Tuesday, FR said it believed circumstances have changed since its previous takeover attempts. It listed several factors, including the continued consolidation of European airlines, which it said was leaving EI isolated as an increasingly peripheral player in the marketplace.

It added that any competition concerns raised by the EC “can be addressed by Ryanair making appropriate remedies.”

The FR statement said the two carriers could complement each other, with FR helping EI “by growing Aer Lingus’ short-haul fleet to offer more competition at some of Europe’s major airports where currently Aer Lingus operates and Ryanair has no desire to fly.”

EI’s transatlantic operations would also benefit from FR’s investment to grow, the LCC stated.

By Alan Dron

Hmm...wonder what Etihad thinks about this...

[unwantedB1]

Someone else needs to take over Ryanair!!!!!!!

[willdoatrip]

Heard that Air Lingus has actual cash to the value of the Airline in it's coffers and it is this that O'Leary is trying to get his grubby hands on.

[No Smoking]

Heard that Air Lingus has actual cash to the value of the Airline in it's coffers and it is this that O'Leary is trying to get his grubby hands on.

Er..but FR has to buy other shareholders out, first. meaning spending her own money..

Can't imagine Etihad will not be keen to increase own holding. Except, as Billy advised, a Man City connection with FR may mean a subtle support.

[willdoatrip]

FR wants the whole lot. It's offer is per share which will include man city's. It then has all the assets plus the cash good deal for O'Leary

[Billy No Mates]

There's a couple of things at play here and nobody knows for sure what his actual intentions are, what is known is that....

Ryanair is currently under investigation by the UK OFT who believe that their 30% shareholding in EI is anti competitive, a negative finding here could force Ryanair to sell their shareholding forcing down the share price.

Ryanair's 30% shareholding is worth €250M less than they paid for them, this deficit is registered as a loss on their balance sheet, the speculation surrounding events since the takeover bid was announced has forced up the share price (of EI and FR) and reduced this loss on their balance sheet, this increase in share price has also served as a deterrent to other would be investers (Etihad etc).

O'Leary could be just stirring the shit and generating publicity for himself, the Irish government have previously said that they would never sell the shares for less than €1 each, by offering €1.30 per share they are effectively putting it up to the government.
Many analysts are sceptical that Ryanair could actually complete the takeover but if they were successful not only would they be ridding themselves of their only competitor in own their back yard but they would also reap the rewards of the LHR slots (one of EI's most precious assetts) their facilities (offices and hangar) plus the Aer Lingus cash reserves.

[No Smoking]

ATW Online: Thursday June 21, 2012
Aer Lingus board rejects Ryanair takeover

In an expected move, the Aer Lingus (EI) board has rejected the third attempt by low-cost carrier (LCC) Ryanair (FR) to take over the company, saying the bid undervalued the Irish flag-carrier (ATW Daily News, June 19).

According to an EI statement, its management team “has delivered a significantly improved operational and financial performance since 2009, transforming Aer Lingus into a robust, profitable airline.”

It [EI] also said the UK Competition Commission (CC) was currently investigating FR’s 29.82% stake in EI, built up at the time of two earlier takeover bids, “with the result that Ryanair is now under a legal prohibition from undertaking any further integration with Aer Lingus without the consent of the CC; and may be subject to an order to sell down its shares at the end of the CC investigation.”

EI has long wanted FR to be forced to divest its shareholding, arguing it is intolerable [that] its main competitor holds such a large stake in it.

The statement also noted that FR’s 2006 takeover bid was blocked on competition grounds by the European Commission. “Consequently there is significant uncertainty that any offer from Ryanair, if made, would be capable of completion.”

FR argued the world has moved on since its earlier bids, with the EC having allowed several major European airline takeovers in the intervening period and that EI needs a more powerful partner to prevent it becoming an increasingly peripheral player in the marketplace.

EI advised its shareholders to take no action on the FR offer.

By Alan Dron