Aer Lingus mulls £1bn takeover bid
Aer Lingus has confirmed it is considering a sweetened takeover offer worth £1 billion from the owner of British Airways.
The statement from the Dublin-based carrier follows speculation that its board is set to back the latest proposal from International Airlines Group (IAG), which values Aer Lingus at 2.55 euros a share, equivalent to 1.36 billion euros (£1.01 billion).
As well as a recommendation from the Aer Lingus board, the company said IAG's offer was conditional on the support of major shareholders Ryanair and the Irish Government.
The Irish Government holds a 25% stake in Aer Lingus and will want reassurances from the BA and Iberia owner over its plans for the key Dublin to Heathrow route.
Low-cost airline Ryanair, which owns just under 30% of Aer Lingus following a series of failed takeover attempts, may be tempted to sell at the new price as it has been told by UK competition authorities to sell down its stake because it potentially distorts the market for flights between Ireland and Britain.
Currently, Aer Lingus directly employs 3,900 people, mostly in Dublin, with 2,100 of these described as ground staff in areas such as clerical, operative and back office roles.
Ireland's deputy prime minister warned yesterday that protecting Ireland's air links with Europe and the US was vitally important in terms of inward investment, exports, business and tourism.
Tanaiste Joan Burton told RTE Radio: " What we will want to do as a Government, and what's absolutely important, is to protect these slots and the connections of direct flights in and out of Ireland."
Aer Lingus is well known to IAG boss Willie Walsh as he ran the airline between 2001 and 2005 before taking the helm at British Airways.
IAG's interest in Aer Lingus stems from its desire for additional Heathrow runway slots as well as the opportunity to deliver more industry cost efficiencies.
Aer Lingus is the fourth busiest operator at London's Heathrow behind British Airways, Lufthansa and Virgin Atlantic.