Jan 27, 2015 5:51 AM
Aer Lingus backs takeover, needs Irish government support
The Associated Press
DUBLIN (AP) Aer Lingus said Tuesday it supports a takeover bid by British Airways parent IAG, putting the Irish national airline with its trademark shamrock tailfins on course for foreign acquisition nine years after its privatization.
The 11-member Aer Lingus board said it could recommend IAG's latest bid of 2.55 euros ($2.85) per share, valuing the airline at 1.36 billion euros ($1.52 billion). It emphasized that the proposal required backing from the two biggest shareholders: rival Irish carrier Ryanair and the Irish government.
Ryanair, which acquired a 29.8 percent shareholding as part of three failed hostile takeover bids, declined to comment.
The government, which retained a 25.1 percent share when it privatized Aer Lingus in 2006, opposed Ryanair's ambitions and has emphasized its concern that a private owner could weaken travel connections for Ireland, an island nation.
Aer Lingus is the fourth-largest owner of landing slots at Heathrow, Europe's most strategic and crowded hub airport. Those slots alone are valued at 400 million euros ($450 million) and could be used by new owners for more lucrative long-haul routes.
Transport Minister Paschal Donohoe has briefed fellow government ministers about the takeover offer.
The Aer Lingus board said IAG executives had offered assurances that Aer Lingus would remain "a separate business with its own brand, management and operations, continuing to provide connectivity to Ireland."
Later, Madrid-registered IAG said it intended to talk directly with Irish government leaders to explain that their takeover plan "would secure and strengthen Aer Lingus' brand and long-term future."
IAG said Ireland was geographically well positioned to handle more U.S.-European long-haul traffic. It said Aer Lingus would benefit from increased cooperation with IAG's main U.S. partner, American Airlines, which directly competes with Aer Lingus on Chicago and New York routes.
IAG was created in 2009 by the merger of British Airways and Spanish airline Iberia. Its Irish chief executive, Willie Walsh, led Aer Lingus from 2001 to 2005.
Ryanair Chief Executive Michael O'Leary has not ruled out making another bid for Aer Lingus, arguing the airline's future would be better secured by another Irish company. Ryanair is appealing a British competition ruling that it must divest itself of all but 5 percent of Aer Lingus shares.