We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedGovernance

Aer Lingus calls on investors to reject Ryanair takeover bid


The takeover battle is expected to last into next year

Article comments

Irish flag carrier Aer Lingus asked shareholders on Friday to reject rival Ryanair’s €700 million (£554.87 million) takeover offer in what is expected to be a protracted battle.

Ryanair promised to offer EU competition authorities, which neither airlines expects to approve the bid by Wednesday decision date, "radical remedies" to address competition concerns, but Aer Lingus said the bid was doomed to fail.

"Ryanair's offer is not in the interests of shareholders, fundamentally undervalues the business and is likely once more to be prohibited by the European Commission," Aer Lingus said in a statement to shareholders published on Friday.

"The board re-affirms its recommendation that shareholders should reject the offer," it said.

Instead they expect it to move to a longer Phase II process that can last up to 105 working days, which would push a resolution into 2013.

Aer Lingus' shares have gained 14 euro cent to 1.08 since Ryanair announced its bid in June, but remain 22 cents short of the offer price, implying that many traders are yet to be convinced that the bid will be successful.

The European Commission, which acts as EU competition watchdog, is among the biggest impediments to a deal which was announced in June and is Ryanair's third attempt to take over the former state carrier.

The EU executive blocked Ryanair's 2007 attempted takeover of Aer Lingus, saying the combined group would monopolise or dominate 35 routes, leading to consumers paying more. It said Ryanair had not offered to give up enough airport slots to allay its concerns.

Ryanair, which already owns 30 percent of Aer Lingus, dropped its second offer in 2009.

In its statement, Aer Lingus said the EC would likely reject the takeover bid, something it can only do after a Phase II probe.

Ryanair CEO Michael O'Leary told journalists in Madrid on Thursday he expected the EC to move to Phase II but said he would offer unspecified remedies to allay competition concerns.

READ ALSO:

CFO Interview with Aer Lingus CFO Andrew Macfarlane

Share:

Comments

Aer Lingus calls on investors to reject Ryanair takeover bid
Governance

What makes a good board report?

What makes a good board report?

Examining how CFOs can improve the way they report back to the boardmore ..


Vodafone buys out partner's stake in Indian unit

Mobile giant acquires the remaining 11% it did not already ownmore ..

Financial advisers not being clear enough on charges, says watchdog

FCA’s review found 73% of firms failed to provide adequate informationmore ..

EU data retention rules violate privacy rights, EU court rules

Rules requiring telcos to retain communications metadata are disproportionate, the court saidmore ..

Examining the issue of corporate litigation funding

Litigation funding is a very useful tool for CFOs but not a panacea for all legal mattersmore ..

Corporate governance: A catalyst for innovation

Corporate governance is a powerful tool in a C-suite executive’s arsenalmore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

In Depth
What every company needs to do about big data?

What every company needs to do about big data?

In the first of a three part series, Pat Brans explores just how big 'big data' will get? more ..

Advertisement

* *