Aer Lingus Recommends New $1.5B Takeover Offer From IAG
International Business Times
Published Jan 27, 2015 06:04AM ET
Updated Jan 27, 2015 06:31AM ET
Aer Lingus Recommends New $1.5B Takeover Offer From IAG
By Sneha Shankar -
Irish carrier Aer Lingus' board said Tuesday that it was “willing to recommend” a takeover offer worth 1.36 billion euros ($1.52 billion) from International Consolidated Airlines Group (IAG), the parent of British Airways and Iberia. The latest offer is the third one from IAG in six weeks.
The latest offer is worth 2.55 euros a share, and includes a cash offer of 2.50 euros a share and a dividend of 0.05 euros. The new offer would also have to be approved by Ryanair and the Irish government. Ryanair has a 29.8 percent stake in the Irish carrier while the government owns 25.1 percent, BBC reported, adding that IAG’s main interest in Aer Lingus is the 23 pairs of take-off and landing slots at Heathrow airport valued at 40 million euros each. The move would help IAG operate more flights out of one of the busiest airports in the world.
"IAG recognises the importance of direct air services and air route connectivity for investment and tourism in Ireland and intends to engage with the Irish Government in order to secure its support for the transaction," IAG said, in a statement, according to Reuters.
According to assurances given by IAG's leaders, Aer Lingus "would operate as a separate business with its own brand, management and operations, continuing to provide connectivity to Ireland," The Associated Press reported. Meanwhile, Ryanair said, according to the New York Times, that it would be willing to consider an offer for Aer Lingus between 2.50 to 2.70 euros a share.
IAG, which is one of the world’s largest airline groups, owns British Airways and two Spanish carriers -- Iberia and Vueling Airlines. The company carried over 77.3 million passengers in 2014 and earned a revenue of 15.2 billion euros in the first nine months of last year, showing an increase of 7.4 percent as compared to the same period in 2013.
Transport Minister Paschal Donohoe, who is scheduled to brief the cabinet on the proposal on Tuesday, said that the decision to approve the acquisition would consider factors other than price, such as analyzing the effect of the merger on Aer Lingus workers and its brand. It would also evaluate the competition on the route and the connectivity to Ireland, Reuters reported. Aer Lingus' main trade union, however, said that a takeover may lead to 1,200 people losing their jobs.
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Written By: International Business Times
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