Aer Lingus rejects Ryanair takeover
Aer Lingus has rejected Ryanair‘s offer of a €750m for a second time, following a meeting between the two airlines in Dublin yesterday.
A spokesperson for Aer Lingus said: “Aer Lingus explained to Ryanair at the meeting how the bid fundamentally undervalues the airline, its robust financial position, ignores the substantial competition issues and is therefore not capable of completion.“Ryanair yesterday extended the period of acceptance of the take-over from an initial deadline of 5 January to 13 February.
“The offer has been extended and will remain open for acceptance until 1pm Dublin time on 13 February, 2009,” Ryanair said in a statement.
Aer Lingus management had urged shareholders to reject the takeover, saying it contained “nothing new”.
The airline’s workers, which control a 14% stake, have worries over job prospects, despite assurances from Ryanair.
The low-cost carrier has offered 1.40 euros a share for its arch rival, just half the price of a previous offer in 2006 which was blocked by the EU on competition grounds.
The 2006 offer was also strongly opposed by major Aer Lingus shareholders, including the Irish government, company employees, pilots and their pension fund.
However this time Ryanair says it plans to operate both airlines as separate companies with distinctive brands.
Following the extension of the deadline, Aer Lingus released forward figures, saying it expects to make a profit for 2008, despite an operating loss of around €20m for the year.
This profit will be as a result of interest on cash savings and the airline also says it expects to make a profit this year due to some €50m in savings from deals done with staff over the past year. The airline said that it will also benefit from lower fuel prices, having hedged 72pc of its fuel needs for this year at US$911 a tonne for 2009.