THE BOARD of Aer Lingus has advised shareholders not to take any immediate action following yesterday’s announcement by Ryanair that it would launch a new attempt to gain control of its Irish rival.
In a brief statement this morning the flag-carrier’s board said it “notes” Ryanair’s bid, where the budget airline is offering €1.30 for each of the airline’s shares.
That bid would value the airline at a total of €694 million – a healthy valuation when compared to the €502 million that it would cost to buy each of Aer Lingus’s shares at €0.94, the price they traded at yesterday.
“Aer Lingus will make a statement in due course. In the meantime, Aer Lingus shareholders are urged to take no action,” the board said.
Announcing its latest takeover attempt yesterday, Ryanair said the circumstances surrounding a potential purchase had “changed materially” since its first bid was rebuffed in 2006.
An Aer Lingus takeover would not be subject to the approval of its own shareholders, Ryanair said, because the investment needed to purchase the airline would be below the threshold requiring an EGM.
The government, which owns a 25 per cent stake in Aer Lingus, has previously indicated its willingness to sell the shareholding, though transport minister Leo Varadkar said the government would reject any price below €1 per share.
Ryanair’s attempt may yet face opposition from the European Commission which blocked a similar plan in 2007 on the grounds that a merged airline would hold too great a share of the Irish aviation market.
The latest attempt is Ryanair’s third to gain full control of its older rival: in October 2006 it offered €1.48 billion to buy the company, and in December 2008 it offered €748 million in a bid which was rejected by the board.