Aer Lingus confirms IAG takeover bid at 2.55 euros per share
DUBLIN (AP) Aer Lingus announced Monday that British Airways parent IAG has made an improved takeover offer of 2.55 euros ($2.85) per share, and the board of the Irish airline says it is considering the proposal.
The offer the third by IAG in the past month values Aer Lingus at more than 1.3 billion euros ($1.45 billion). Unlike previous offers, the Aer Lingus board did not reject this offer outright.
Instead, Aer Lingus said acceptance of IAG's all-cash offer would require "irrevocable commitments" from the two biggest shareholders: rival budget carrier Ryanair and the Irish government. Ryanair has a nearly 30-percent stake, the government 25 percent.
Monday's published offer is higher than the figure of 2.50 euros per share that airline officials circulated to British and Irish media over the weekend. It includes payment of an extra 5 cent dividend per share.
IAG, which was formed in 2009 by a merger between British Airways and Spanish carrier Iberia, is led by Willie Walsh, the Irishman who was chief executive of Aer Lingus from 2001 to 2005. It long has been considered a logical suitor for Aer Lingus following the failure of three hostile takeover bids by Dublin competitor Ryanair.
Walsh opened IAG's bidding last month with a 2.30 euros-per-share offer, and raised it to 2.40 euros. The move coincided with the imminent departure of Aer Lingus chief executive Christoph Mueller, who is taking the same position at troubled Malaysia Airlines.
Aer Lingus is most prized for its ownership of 24 landing slots at Heathrow Airport near London, British Airways' primary base. Those are valued at 400 million euros ($450 million) alone.
Aer Lingus also has a profitable, growing trans-Atlantic network to the United States operating from two Irish airports that, uniquely in Europe, allow U.S.-bound passengers to clear American immigration and customs checks on Irish soil. Industry analysts believe IAG could funnel hundreds of thousands of European travelers annually to the United States through Irish airports rather than overcrowded Heathrow.
The government is pulling Ireland out of six years of austerity, and the offer would deliver an estimated 335 million euros to reduce debt. But surrendering the remaining state hold on Aer Lingus an emotional totem of Irish independence, with its emerald green fuselages and shamrock-bedecked tailfins risks bringing the government into conflict with nationalist opposition leaders and labor unions, which fear cuts to Aer Lingus' 3,900-strong unionized work force.