Opposition to Ryanair's bid is another reminder of the ill-will the establishment has for Michael O'Leary and his brand.
By Finnbar Flynn
Ryanair Holdings Plc’s bid for Aer Lingus Group Plc will have to overcome concerns that it would give Europe’s biggest discount carrier a near monopoly over routes out of Ireland, Transport Minister Leo Varadkar said.
“We have to consider whether giving any airline or airline group a monopoly on most of the routes out of Ireland is a good idea or not,” Varadkar said today in an interview with Dublin- based broadcaster RTE. “What can stop them is competition law, EU competition law and potentially even U.K. competition law.”
Ryanair, which already owns 29.8 percent of Aer Lingus, made a 694 million-euro ($882 million) bid to acquire the former national carrier on June 19. Varadkar said the government, which will discuss the proposal on June 26, wants to get a “good price” for its remaining 25 percent holding and that the offer is lower than the carrier’s cash holdings.
Aer Lingus had gross cash of 1 billion euros as of March 31, with debt of 556.1 million euros, according to a trading statement on May 3.
Irish billionaire Denis O’Brien, an Aer Lingus investor who opposed an attempted takeover by Ryanair five years ago, said in a Bloomberg Television interview that he has increased his stake in the smaller airline.
Telecommunications and media mogul O’Brien said Ryanair’s renewed pursuit undervalues Aer Lingus and may be “a ploy” to start talks with Abu Dhabi-based Etihad Airways, which bought a 2.99 percent stake in Aer Lingus last month. The billionaire himself has a 3.6 percent to 3.8 percent holding, he said.
Aer Lingus was trading down 2.3 percent at 1.06 euros as of 9:13 a.m. in Dublin, 24 cents below the offer price, after climbing 15 percent yesterday. Dublin-based Ryanair was up 0.2 percent at 4.02 euros.
–Editors: Chris Jasper, Dara Doyle.
To contact the reporter on this story: Finbarr Flynn in Dublin at [email protected]
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