News: Ryanair launch Aer Lingus takeover bid
Flights > News > # 998 (05/10/2006)
No-frills airline Ryanair has launched a £1 billion bid to buy rival Irish carrier Aer Lingus.
Ryanair chief Michael O'Leary said the move was a “unique opportunity” to form a “strong” Irish airline, although he added that there were no plans to merge the carriers.
Aer Lingus said it was considering the offer, but had no further comment. The Irish government, which owns at least 25.1% of Aer Lingus, said it is commited to competition in the Irish aviation market and would not sell its shares. However, Mr O'Leary said Ryanair would be “more than happy” for the government to retain its stake.
News of the takeover approach pushed Aer Lingus shares up 11%, though Ryanair shares fell 2%. Ryanair has already bought a 16% stake in Aer Lingus since the Irish national carrier’s shares were floated on the London and Dublin stock markets. Shares began trading at €2.20 each, and Ryanair is offering 2.80 euros per share for remaining stocks. The flotation followed a decision by the Irish government to sell more than half of its 85.1% share in the company. Workers retained a 15% stake. If accepted, the Irish Government would get more than €500 million from the sale and Aer Lingus employees would gain €200 million, Ryanair said.
Ryanair said that if the deal went through Aer Lingus would be able to cut the price of its short-haul fares and its fuel surcharge. It also said it would be able to improve Aer Lingus' long-haul service and its cargo division.
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