Aer Lingus Urges Rejection Of Ryanair Offer
Published: July 18, 2012
Irish airline Aer Lingus predicted competition regulators would continue to block a takeover by Ryanair as it repeated its call for shareholders to reject the latest EUR€694 million (USD$ 849 million) offer from its rival.
Ryanair published its offer document on Tuesday, fleshing out its third bid for Aer Lingus which offers shareholders EUR€1.30 per share in a move aimed at increasing its stake to at least 50 percent from just under 30 percent.
Ryanair needs the approval of the European Commission, which in 2007 blocked an earlier bid on competition grounds. Aer Lingus said the reasons for another rejection on these grounds had increased in the interim.
“Ryanair’s 2006 offer was prohibited by the European Commission on competition grounds, and your board believes that the reasons for prohibition are now even stronger than before: the number of routes that Ryanair would monopolise has sharply increased,” Aer Lingus said on Wednesday.
“Your board has received legal advice that the European Commission is likely once more to prohibit the Ryanair Offer, and that this is not therefore a credible Offer which is capable of completion.”
Aer Lingus, in which the state still retains a 25 percent stake, repeated that it believes Ryanair’s offer undervalues the company.
Ryanair said on Tuesday that the offer was open for acceptance until September 13.