Aer Lingus rejects takeover bid
A fresh attempt by the owner of British Airways to buy Aer Lingus has been rejected by the board of the Dublin-based carrier, it emerged tonight.
International Airlines Group (IAG), which also owns Spain's Iberia, pitched its latest proposal at 2.40 euros a share, valuing Aer Lingus at about £1.28 billion euros (£1 billion).
The latest offer was made on December 29 and represented an improvement on an initial proposal worth 2.30 euros a share. Prior to the disclosure of IAG's latest proposal, Aer Lingus shares closed tonight at 2.50 euros.
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 add itional 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.
Its fortunes have improved in recent months and under c hief executive Christoph Mueller it reported the airline's strongest summer trading performance since the financial crisis, with operating profits up 19% to 112.9 million euros (£88.5 million) in the quarter to September 30.
The airline carried nearly a quarter more long-haul passengers in the period than a year earlier while increasing its revenue per seat.
It plans to launch a new Dublin to Washington service next May and will also increase services on existing transatlantic routes.
A takeover battle for Aer Lingus could pitch Mr Walsh against rival Michael O'Leary's Ryanair airline, which still owns just under 30% of Aer Lingus. The Irish Government retains a 25% stake in the carrier.
Ryanair has been frustrated in its attempts to buy Aer Lingus and has been told by UK competition authorities to sell down its stake because it potentially distorted the market for flights between Ireland and Britain.
IAG was formed from the merger of British Airways and Iberia in 2011.
It has around 430 aircraft and employs more than 60,000 people. A restructuring programme at the previously loss-making Iberia has seen 2,500 staff leave the airline under a voluntary redundancy programme.
IAG recently forecast it will make a bigger than expected profit for 2014, stepping up pressure on rivals Air France-KLM and Lufthansa.
The London-based airline said: "IAG notes recent press speculation and confirms it submitted a revised proposal to make an offer for Aer Lingus on 29 December 2014, which has been rejected by the board of Aer Lingus."