Aer Lingus rejects formal bid from Ryanair
Ryanair formally launched a €748 million bid for rival Aer Lingus yesterday.
The low-cost airline owns close to 29.8 % of Aer Lingus and is offering €1.40 a share for remaining 70.2%.
But the offer was immediately rejected by Aer Lingus, which argued that it “significantly undervalues” the airline.
Chairman Colm Barrington dismissed the offer, saying it contained “nothing new”.
Aer Lingus also warned the deal would create a monopoly on flights to and from Ireland.
Ryanair chief executive Michael O’Leary argued that the price being offered is 25% higher than the value of Aer Lingus on November 28, the day before Ryanair announced its intention to make a bid.
He said if the take over goes ahead, it will run Aer Lingus separately, maintain the airline’s brand and guarantee its Heathrow slots.
He also said it would double Aer Lingus’ short-haul fleet, creating 1,000 jobs, and would cut short-haul fares by 5% on average for three years.
Ryanair has guaranteed €100 million to the government if it defaults on its promises to cut fares.
O’Leary predicted there would be further consolidation in the airline industry and believes that Europe will eventually only have four airlines – Ryanair, Lufthansa, Air France/KLM and British Airways.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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