Ryanair has voted to accept IAG's offer for its 29.8% stake in Aer Lingus, clearing another of the hurdles in the British Airways parent's move to acquire the Irish national carrier.
The Irish budget operator built up its stake in Aer Lingus during its own aborted takeover attempts, which began in 2006 but were ultimately blocked by European regulators.
"We believe the IAG offer for Aer Lingus is a reasonable one in the current market and we plan to accept it, in the best interests of Ryanair shareholders," says Ryanair chief executive Michael O'Leary. "The price means that Ryanair will make a small profit on its investment in Aer Lingus over the past nine years."
Ryanair says that in line with this decision it will vote in favour of a motion at the Aer Lingus extraordinary general meeting on 16 July to give the Irish government a golden share over the carrier's London Heathrow slots, and will vote its shareholding in favour of accepting the IAG offer. That is subject to the deal securing regulatory approval.
In late January, Aer Lingus management conditionally backed a third bid from IAG, offering to pay €2.55 for each share, comprising €2.50 for each share and a €0.05 cash dividend per share. A deal was dependent on securing acceptance from the Irish government, which owns 25.1% of the carrier, and from Ryanair. The Irish government in late May agreed to accept IAG's offer.
Ryanair's own attempts to acquire Aer Lingus were blocked by European regulators and it has since been fighting a UK competition ruling under which it would have to sell its stake down to below 5%. Ryanair has since 2011 said it would consider selling its Aer Lingus if a strong airline acquired the government's share.
"This sale of our stake is timely given that our original strategy for Aer Lingus – to use it as a mid-priced brand to offer competition to flag carriers at primary airports – has been overtaken by the successful roll-out, since September 2013, of Ryanair's 'Always Getting Better' strategy, which has seen the Ryanair brand successfully enter many of Europe’s primary airports," says O'Leary.
Source: Cirium Dashboard