Heathrow slots up for grabs
Ryanair and Dublin government hold key to Aer Lingus
Aer Lingus said it would recommend the third offer worth €2.55 a share comprising an all cash offer of €2.50 per share and a cash dividend of €0.05 per share. It values the Dublin-based airline at €1.3 billion.
But to succeed, IAG needs the support of the Irish government and Ryanair who own large holdings in the carrier. The government holds 25% and budget airline Ryanair 29.8% following a number of failed attempts to acquire its rival.
Two earlier bids, the last at €2.40 a share earlier this month and the first at €2.30, were declined.
There was speculation that IAG would be forced to bid between €2.80 and €3 to seal a deal but the Irish airline has accepted a price in a range predicted by Daily Business on 12 January.
A deal will give BA more take-off and landing slots at Heathrow which is close to capacity, preventing it from adding more flights.
Shares in Aer Lingus closed on Friday at €2.35, just ahead of the latest offer being lodged.