Belfast Telegraph

BA owner 'won't up Aer Lingus bid'

British Airways owner International Airlines Group (IAG) said it would not up its 1.4 billion euro offer for Aer Lingus amid speculation that major stakeholder Ryanair will play "hard ball" over the deal.

The low-cost airline, which owns 29.8% of Aer Lingus, has become "kingmaker" in the takeover bid after the deal was given the green light by the government - which itself has a quarter share of Aer Lingus.

IAG chief executive Willie Walsh said it was a "compelling offer" and that he expects Ryanair, controlled by Michael O'Leary, to "behave in a rational way".

A stock exchange announcement from the group today said: "IAG confirms that the offer price is final and will not be increased."

Earlier this week it was announced that terms on a deal have been agreed by the Aer Lingus board and details of the recommended offer are being sent to shareholders but Ryanair has been keeping its cards close to its chest.

The airline said that its position has not changed, that it has yet to receive any offer, and that it will "consider any offer on its merits, if and when an offer is made".

Mr Walsh said yesterday that he has not talked to Ryanair in recent weeks and could not cut any deal with the low cost carrier on routes or other arrangements, under competition and takeover laws.

IAG is offering Aer Lingus shareholders 2.55 euro in cash per share, under the proposed deal backed by the airline's management but disputed by trade unions and opposition parties in Ireland.

Mr Walsh said that offer "was the limit" and suggested he was not expecting Ryanair to frustrate the bid.

"'I believe Ryanair will see the merit of the case we have made, the value we are offering in terms of this takeover and will want to see the deal go through,'' he said.

Under terms struck with the Irish government, "legally binding" commitments have been given on routes in and out of Ireland, as well as the Aer Lingus brand being retained and the airline being headquartered in Dublin.

The background to the transaction is complicated by a long-running battle fought by Ryanair against UK competition authorities, which have ordered it to cut its stake in Aer Lingus.

Analysts at Jefferies have described the low-cost carrier as the "kingmaker" in the deal, saying it "may yet prove troublesome".

They said that given its own frustrated track record with Aer Lingus and its current position of strength - after it earlier this week posted a 66% rise in annual profits - they "would not be surprised to see Ryanair play hard ball".

"Presumably if Ryanair rejected the offer as too low, the onus would be on IAG to return with a higher bid for all shareholders," the analysts said prior to today's statement from IAG - which appeared to close the door on such a move.


From Belfast Telegraph