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Ryanair to Make Cash Offer for Aer Lingus

Ryanair to Make Cash Offer for Aer Lingus

Ryanair Holdings plc has announced its intention to make an all cash offer of €1.30 per share for the entire issued and to be issued share capital of Aer Lingus Group plc, valuing the current issued share capital of Aer Lingus at approximately €694 million. In response, the Board of Aer Lingus has noted Ryanair’s intention “to make a third unsolicited offer” and said: “Aer Lingus will make a statement in due course. In the meantime, Aer Lingus shareholders are urged to take no action.”

Ryanair, which owns 29.82% of Aer Lingus, intends to make its offer through its wholly owned subsidiary, Coinside Ltd.

Aer Lingus

Aer Lingus Statement

Later, Aer Lingus issued the following statement: “The Board of Aer Lingus Group plc has considered the announcement by Ryanair Holdings plc of its intention to make a third unsolicited offer for 100% of the entire issued and to be issued share capital of Aer Lingus.

“In evaluating any offer, the Board must consider the uncertainties and risks relating to it. The UK Competition Commission is currently investigating Ryanair’s 29.82% holding in Aer Lingus with the result that Ryanair is now under a legal prohibition from undertaking any further integration with Aer Lingus without the consent of the CC; and may be subject to an order to sell down its shares at the end of the CC investigation. Furthermore the Board notes that Ryanair’s unsolicited offer in 2006 was blocked by the European Commission and was not capable of completion and that Ryanair’s second offer, in 2008, was withdrawn. Consequently there is significant uncertainty that any offer from Ryanair, if made, would be capable of completion.

“The Aer Lingus management team has delivered a significantly improved operational and financial performance since 2009, transforming Aer Lingus into a robust, profitable airline which is well positioned to serve the key role of ‘Connecting Ireland to the World’. Management’s successful strategy of focusing on demand-led network management and the introduction of extensive cost saving initiatives has delivered sustained and improved profitability, resulting in a turnaround in operating performance of approximately €130 million since 2009. Aer Lingus has a proven business model and a strong balance sheet including cash of in excess of €1 billion at 31 March 2012, leaving it well positioned for the future.

“The Board, having considered the Offer with its advisers, believes the Offer, even if it is capable of completion, undervalues Aer Lingus.

“Aer Lingus shareholders are accordingly advised to take no action in relation to the Offer.”

Etihad and ESOT

Etihad Airways, which currently owns 2.99% of Aer Lingus may be interested in acquiring the Irish Government’s 25% shareholding – that is being sold as part of the agreement with the EU, ECB and IMF – and which it could acquire without reaching the 30% shareholding that would require Etihad to make a bid for 100% of the shares.

The ESOT no longer controls 15% of Aer Lingus, having been disbanded in December 2010 and the shares distributed to individual members, and Ryanair is hoping that its new offer is capable of reaching over 50% acceptances “either with or without the acceptance of this offer by the Irish Government”.

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NEIL STEEDMAN has been a trade journalist, copywriter, editor and proofreader for 50 years, and News & Features Editor for ‘Irish Travel Trade News’ for the past 40 years.

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