RYANAIR HAS OFFERED to buy Aer Lingus for around €694 million in cash in a surprise announcement this evening.
It is the third time that Ryanair has attempted to take over its rival. The budget airline already owns 29.82 per cent of Aer Lingus.
In a statement to the Irish Stock Exchange, Ryanair said that it would offer €1.30 per share for the entire share capital of Aer Lingus. Shares in Aer Lingus were trading at 94 cent at the close of business today before the announcement was made.
Ryanair said that it believes circumstances have ‘changed materially’ since its first unsuccessful bid for Aer Lingus in late 2006.
The company said that the air transport market in Europe is consolidating into five major airlines – Air France, BA, Easyjet, Lufthansa and Ryanair – and that the long term future of Aer Lingus can best be secured within one strong Irish airline group led by Ryanair.
Ryanair said that Aer Lingus fares could be reduced and its traffic decline between 2009 and 2011 reversed by the move.
If the offer is successful, Ryanair said that Aer Lingus would be put on a ‘growth trajectory’ which will see Aer Lingus continue to fly to a number of Europe’s primary airport where currently Aer Lingus flies but where Ryanair does not wish to operate.
The budget airline said that the price per share that it is offering is 38.3 per cent higher than the closing price of an Aer Lingus share today and 46.7 per cent higher than the average closing price of an Aer Lingus share over the past six months.
The Irish government has said that it is open to selling its 25 per cent stake in Aer Lingus ‘at an appropriate time’ but only when market conditions are favourable and an acceptable price is agreed by Government.
Transport Minister Leo Varadkar has previously said that the Government would not sell off its stake for less than €1 per share.