IAG says to make formal bid for Ryanair's Aer Lingus stake

27th May 2015, Comments 0 comments

International Airlines Group will issue a formal bid for Ryanair's near 30-percent stake in Aer Lingus within 28 days but will not increase the price offered, it said Wednesday.

"We're in the position now where we will be issuing the formal offer documents within 28 days," IAG chief executive Willie Walsh told a news conference in Dublin.

After months of deliberations, the Irish government announced on Tuesday it would sell its 25.1 percent stake in the former flag carrier to IAG, owner of British Airways and Spain's Iberia, after receiving assurances on the airline's future.

Walsh said he did not expect any direct discussions with Ryanair, which is the largest shareholder in Aer Lingus with a 29.8-percent holding.

He also ruled out any increase on the 2.55 euros per share offer, which values the airline at 1.36 billion euros ($1.7 billion).

"We're not expecting to have any talks with Ryanair," Walsh said.

"The offer we've made is the limit to which we're prepared to offer.

"I would believe that Ryanair will see the merit of the case that we've made, the value that we're offering in terms of this takeover and will want to see the deal go through."

Ryanair spokesman Robin Kiely told AFP that its board "will consider any offer on its merits, if and when an offer is made".

The budget airline, which has built-up at 29.8 percent stake in Aer Lingus, has launched three unsuccessful takeover attempts for its Irish rival.

It has fully written-down the cost of acquiring the Aer Lingus shares and has been ordered by the UK Competition and Markets Authority to reduce its stake to 5.0 percent.

Meanwhile, unions and opposition politicians in Ireland have reiterated their concerns about the sale.

Unions fear job losses and deteriorating working conditions after restructuring, despite IAG promising up to 635 new net jobs by 2020.

Prime Minister Enda Kenny said the decision was the "best deal for Ireland."

"This deal is the best means of securing and enhancing Ireland's connectivity with the rest of the world and maintaining a vibrant and competitive air transport industry in Ireland," he said during a speech on Wednesday.

Discussions on the sale got underway in parliament on Wednesday with a vote necessary before Dublin can complete the sale.

The European Commission will also have to assess the takeover on competition grounds.

© 2015 AFP

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