Just days after the UK's competition regulator referred its minority 29% stake in Aer Lingus for further scrutiny, Ryanair has made a surprise bid for the remaining shares in its rival.
The low-cost carrier intends to offer €1.30 per share, valuing Aer Lingus at approximately €694m, it says in a statement issued after the markets had closed.
It represents a 38.3% premium over the closing price of €0.94 on 19 June, it says.
Ryanair cites consolidation of the airline market in Europe - which will "inexorably" merge into five groups led by Air France-KLM, IAG, Easyjet, Lufthansa and Ryanair - for its decision to make the offer, suggesting that Aer Lingus's "long-term future, its brand and growth prospects" will be best secured within "one strong Irish airline group".
Although previous takeover bids were unsuccessful, Ryanair believes the market has shifted markedly since its initial attempt was rebuffed in 2006. Mergers, such as Air France and KLM, British Airways and Iberia - and more recently the acquisition of BMI - have all been given the nod by Europe's competition chiefs, it notes.
Its offer also represents the best chance of the Irish government "can ensure that Aer Lingus will continue to be owned and managed in, as well as focused upon, Ireland" as it looks to dispose of its 25% stake. A sale at the offer price would net Dublin around €173.5 million.
Ryanair has also pledged to work with Etihad - which holds 3% of the Irish flag carrier - should it wish to bid for the government's stake.
Chief executive Michael O'Leary says: "We believe this offer, if successful, will create value for Ryanair shareholders. We believe that by lowering Aer Lingus' unit costs and fares, growing its business at some of Europe's major airports, and competing with high fare incumbents, Ryanair can significantly increase Aer Lingus' profitability thereby earning superior returns for Ryanair's shareholders."