AER LINGUS HAS written to shareholders warning them that Ryanair’s takeover bid is not in their interest.
Ryanair currently holds an almost 30 per cent share in Aer Lingus. It’s first offer to takeover Aer Lingus was launched in 2007, but was rejected by the European Commission on competition grounds.
In a corporate document circulated to shareholders, Aer Lingus says that Ryanair’s latest takeover offer of €1.30 a share “fundamentally undervalues Aer Lingus and represents a significant discount to the intrinsic value of the business”.
In a letter today, Aer Lingus chairman Colm Barrington says that airline’s board “unanimously recommends that you reject Ryanair’s offer”, adding that shareholders should reject it by taking no action on the takeover bid.
“Your Board believes that this offer will be prohibited by the European Commission on competition grounds,” Barrington writes. “We have received legal advice that there is an even stronger case for prohibition this time than existed at the time of Ryanair’s first failed Offer. Our strategy is working and Aer Lingus is a strong and profitable business.”
In its results report for the first half of 2012, Aer Lingus said that it spent €4.3m on “advisory fees and other costs” arising from Ryanair’s proposed takeover of Aer Lingus.