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BA owner tipped to launch higher offer for Aer Lingus

Aer LingusAnalysts believe British Airways owner International Airlines Group will raise its bid to win over shareholders resisting its takeover bid for Irish carrier Aer Lingus.

The Dublin-based airline rejected IAG’s revised offer of €2.40 (£1.88) per share on Friday night but the market now believes it is only a matter of agreeing a price for a deal to be accepted.

The latest offer is only marginally higher than the €2.30 initial approach and for a deal to succeed could mean IAG paying between €2.80 and €3. This would also encourage 29.8% shareholder Ryanair to sell. However, an offer closer to €2.50 to €2.60 now seems more likely.

A strong fourth-quarter trading update from Aer Lingus has enabled the Irish carrier to hold out for a better offer. Shares closed at €2.50 on Friday, above the IAG price.

Winning support from Ryanair, the biggest shareholder in Aer Lingus, is not only crucial, it would also require Ryanair to drop its challenging to a ruling by UK competition authorities to sell down its stake in the airline to 5% after its own failed bid for the airline.

IAG is keen to acquire Aer Lingus to gain access to even more of Heathrow’s take-off and landing slots.

A deal would also see Mr Walsh return to the airline where he started his career in 1979.

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