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Budget airline to be tempted by €2.60 a share

BA owner to urge Ryanair to sell Aer Lingus stake

Aer LingusBritish Airways owner IAG is expected to urge Ryanair to support its attempts to acquire Irish carrier Aer Lingus.

IAG was thwarted last week with an offer thought to be about €2.20 a share, but analysts believe a higher offer of around €2.60 would have  a chance of success.

But IAG has to win over the Irish Government, a 25% holder, and Ryanair which has a 29.8% stake in the company that has tried three times to acquire its Dublin rival.  Ryanair has already conceded that it no longer has any real interest in buying Aer Lingus.

On Friday, the budget airline was expected to lose an appeal against a Competition Commission ruling that it should reduce its holding in the company to 5%.  However, a decision by the Court of Appeal has been postponed until next month.

Airline experts and analysts believe BA will attempt to persuade Ryanair to support the IAG bid. Two years ago BA signed a memorandum of understanding with IAG to allow BA to buy most of Aer Lingus’s 24 slots at Heathrow if and when Ryanair won full control.

A successful bid would also mean a return to Aer Lingus for IAG chief executive Willie Walsh, who began his career with the Irish carrier.

The Dublin government said it would be prepared to listen to buyers while Irish department of transport has said it would be open to selling its stake at the right price.

Crystal Amber, a near-3% shareholder has said that an improved offer would likely to be received positively, noting that Aer Lingus is a profitable airline with good cash deposits.

 

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