Ryanair launches bid for Aer Lingus

[Pieter C. 5]

Just announced on BBC Breakfast. Michael O'Leary has launched a bid to take

over Aer Lingus.

 

More information on the BBC web site.

 

+

 

08:16 Ryanair this morning announced a takeover bid for its competitor Aer Lingus. In a statement, the low-fares airline said it had already acquired 16 per cent of Aer Lingus and made an all-cash offer of €2.80 per share for the rest of the company. The offer puts Aer Lingus's value at €1.481bn and represents a premium of approximately 27 per cent over last week's IPO share price of €2.20 per share.

 

+

 

Updated: 08:24, Thursday October 05, 2006

 

Cut price airline Ryanair has launched a £1bn takeover bid for its Irish state-owned rival Aer Lingus, it has been announced.

The company had already acquired 16% and now says it is ready to make an offer of £1.88 a share for the rest of it.

Ryanair says it can see opportunities to reduce operating costs and "increase efficiencies".

 

[Nick R. 0]

Wow..LCC 'eats' national carrier!

[Seth K 3]

No way................................increase efficiencies...................oh I know, let's replace the current PTV with pause PTV. Yeah right! Well, now the cheapest to get to LHR from New York is Aer Lingus, but at the brightside, he can make it cheaper next time Well, the one with more money will win, we'll see the result.............

Edited October 5, 2006 by Seth K

[Pieter C. 5]

October 6, 2006

 

Ryanair's USD$1.9 billion bid for Aer Lingus, which would pair a low-cost carrier with a traditional airline, could represent the model for consolidation in the industry, experts say.

 

"This is the first step in what I think will be the next generation of airline consolidation," said Stuart Klaskin, a partner of KKC Aviation Consulting.

 

Merger speculation, especially in the United States, has been rampant recently as the financial performance of airlines improves. And with over 260 carriers in the world, the industry is seen as unwieldy and ripe for thinning.

 

Although the Aer Lingus board has rejected the bid made on Thursday as undervalued, Ryanair's plan would link a rapidly growing point-to-point carrier with a long-haul national carrier.

 

Traditional carriers have for years been losing domestic or short-haul market share to low-cost carriers and the trend is expected to continue. This has led many legacy carriers, such as United Airlines and American Airlines to expand international routes, which are less contested, but often more complex to operate.

 

Combining a low-cost airline with a legacy carrier addresses the weaknesses of the two business models. Legacy carriers struggle to compete domestically because of higher costs, but low-cost airlines struggle with long-haul service, said Klaskin.

 

Airline consultant Robert Mann said these combinations could take the form of full-blown mergers, but more modest partnerships, such as Southwest Airlines' alliance with ATA Airlines, would be easier to carry out.

 

But there will be cultural clashes.

 

Although both are based in Ireland, Aer Lingus and Ryanair would be uncomfortable bedfellows, said Randy Babbitt, chief executive of aviation advisory firm Eclat Consulting.

 

"It would be a very difficult cultural merger," he said.

 

Ryanair is an aggressive, no-frills carrier, while Aer Lingus is a legacy national carrier that has strong links to the Irish government, its largest shareholder.

 

Evidence that there will be problems surfaced on Friday, when Irish opposition politicians and union officials decried the merger proposal.

 

Some industry experts also have doubts about the rationale of merging low-cost and legacy carriers.

 

"I don't really see that model would work," said Geert Boven, acting chief executive of Abu Dhabi-based Etihad Airways. "It's two completely different business models."

 

(Reuters)

 

[Andrew Ong 1]

This appears to be the very first time that a LCC is buying out a national carrier

[Sandeep G 1]

This appears to be the very first time that a LCC is buying out a national carrier

 

Indeed it is.. but it's looking like it won't happen any time soon.. Aer Lingus just recently launched and implemented a restructuring plan.. So how a "takeover" fits into that is very important I suppose to the future of the company. But, realistically.. I think it would be an interesting outcome if Ryanair did manage to take on Aer Lingus..

 

It would be even NICER to show how premium and LCC carriers may mutually benefit from each other without having to merge, but through increased collaboration and government support.. we are almost seeing that here at home, and wouldn't it put Malaysia on the map if it were successful.. unfortunately, too many political hurdles in the way.. I think it's time Tony and Idris jumped on the bandwagon together and started bulldozing all those hurdles and "set the standards"

 

[Pieter C. 5]

Even the EI pilots have purchased EI-stock to prevend FR's bid

[Sandeep G 1]

Even the EI pilots have purchased EI-stock to prevend FR's bid

 

hahaha! my goodness! that must be one of the first times airline pilots and airline management ae actually working together!

[Pieter C. 5]

October 18, 2006

Aer Lingus CEO Dermot Mannion said on Wednesday that Ryanair's EUR1.48 billion euro (USD$1.86 billion) bid for the airline would fail, while investors continued to build stakes that could block the offer.

 

"I believe, we will defeat the Ryanair bid," Mannion told a conference in Dublin. "There are very large regulatory hurdles to be overcome. I don't believe Ryanair can overcome them."

 

But Ryanair Deputy Chief Executive Michael Cawley said the offer was generous enough to secure the 50.1 percent stake it is seeking for control of Aer Lingus, despite objections from shareholders with over 30 percent of the group.

 

Asked by reporters if Ryanair would consider raising its 2.80 euros a share bid, Cawley said "absolutely not".

 

"At this point we believe it's a generous offer," he added at the launch of new routes from Dublin. "I'm speaking at this point, we haven't even published the offer document."

 

The competition implications of Dublin-based Ryanair's surprise bid earlier this month have been a hot political topic in Ireland, given that the two airlines between them account for the lion's share of all air traffic between Ireland and Britain.

 

The Irish government will meet European Union competition regulators to discuss a deal it fears would create a monopoly.

 

Cawley, however, repeated that Europe's biggest low-cost carrier planned to cut Aer Lingus fares if its bid succeeded.

 

Ireland's government has said it would not sell its 28 percent stake in Aer Lingus, and both unions and management object to it. Pilots at the carrier have raised their stake to 2.3 percent in a bid to block the takeover.

Irish businessman Denis O'Brien has also built up a defensive holding, a move Mannion welcomed.

 

In a statement to the stock exchange O'Brien said he had bought over 9.1 million shares at 2.95 euros each, bringing his total holding to 11.1 million, or 2.1 percent, of Aer Lingus.

 

O'Brien, known more for his Caribbean telecoms interests, said he bought the shares because he believed in competition.

 

A pension fund for Aer Lingus pilots said on Wednesday it had topped up its stake despite Ireland's pensions regulator cautioning it was monitoring the share buys, given rules requiring pension trustees not to take unnecessary risks.

 

Aer Lingus staff, whose unions oppose Ryanair's bid, hold roughly 15 percent of the airline, though the Employee Shareholder Ownership Trust that holds the bulk of that stake has not yet said whether or not it favors the bid.

 

Mannion said the bid was a minimal distraction to management and stressed he still expected to reap the rewards from a so far elusive deal on broadening routes between Europe and the US.

 

"We are confident that from 2008 onwards, we will begin to see the benefit from open skies or something like it," he said, adding that, short of a pan-European deal, Ireland and the United States could reach a bilateral agreement.

 

(Reuters)

 

[Pieter C. 5]

The battle is getting fiercer :

 

Ryanair officially launches bid as rival boards squabble.

 

Tuesday October 24, 2006

Ryanair yesterday confirmed to the Dublin and London stock exchanges its takeover offer for Aer Lingus.

 

In the offer document unveiled last week, the LCC maintained its initial bid of €2.80 ($3.53) per share for the recently privatized national carrier. It secured almost 20% of the shares in the days prior to EI's public listing last month.

 

As expected, Aer Lingus reiterated its opposition and urged shareholders to take no action. "The offer from Ryanair is without merit. It fails to recognize the unique position of the group's businesses," Chairman John Sharman said in a statement. "The offer also ignores the significant regulatory issues that a combination would face. A takeover by Ryanair, no matter how it is dressed up, would be bad for Aer Lingus, for its shareholders, for its employees and for consumers."

 

EI will send a letter to shareholders within the two weeks outlining why it believes the offer should be rejected, the Irish Examiner reported.

 

Ryanair responded yesterday with a statement calling on the EI board to "recuse themselves on the grounds that they were all appointed by the Minister of Transport." The LCC noted that two members had chosen not to participate in the board's consideration of Ryanair's offer because they were appointed by the minister, and therefore "the balance of the Aer Lingus board should follow suit [as] it is therefore not appropriate for [the minister's] appointees to decide what is in the best interest of the company and its shareholders."

 

Meanwhile, the Aer Lingus Employee Share Ownership Trust confirmed yesterday in an announcement to the stock exchange that it purchased an additional 15.5 million shares for €2.20 per share as part of an option agreement with the Minister for Finance. The price is that at which the airline listed last month (ATWOnline, Sept. 28) and is well below Ryanair's offer. ESOT now holds 12.58% of EI while the Irish government's holding has been reduced to 25.7%.

 

The government has said it will not sell its shares. Aer Lingus unions also oppose the bid. However, ESOT has not divulged whether it intends to support or reject the Ryanair offer and said it has asked its advisers to review the offer document. Shareholders have until Nov. 13 to accept or decline the offer.

 

other Ryanair news:

 

Tuesday October 24, 2006

Ryanair was forced to postpone introduction of flights from Marseille and Frankfurt Hahn to Morocco owing to a delay in execution of the Euro-Mediterranean air transport agreement between the EU and Morocco. The deal would give EU carriers unrestricted third and fourth freedom rights as well as the right to operate from any point in Europe to any point in Morocco including co-terminal operations. Originally expected to come this month, the signing has been pushed back to Nov. 17.

 

The LCC's flights from Marseille to Fez, Marrakech and Oujda and from Hahn to Marrakech and Fez were scheduled to commence later this month but now will not start until Dec. 1. However, services from London Luton to Fez and Marrakech will launch as planned on Oct. 31, as they are covered by a bilateral agreement between the UK and Morocco. Ryanair announced in May a five-year agreement with the Moroccan government to develop up to 20 routes, delivering almost 1 million passengers annually by the end of the period

 

[Pieter C. 5]

A pension fund for Aer Lingus pilots said on Wednesday it had topped up its stake despite Ireland's pensions regulator cautioning it was monitoring the share buys, given rules requiring pension trustees not to take unnecessary risks.

 

EI pilots increased their stake to fend-off FR; see below:

October 24, 2006

A group of Aer Lingus pilots has bought nearly 2 percent of the airline at 10 cents per share more than the price being offered by budget airline Ryanair, a stock exchange submission showed on Tuesday.

 

The move is the latest in a series of small stake-builds by various groups, including a pilots' pension scheme and Irish businessman Denis O'Brien. It lends weight to suggestions Ryanair is likely to have to raise its offer of 2.80 euros per share.

 

Ryanair formally launched its bid for Aer Lingus on Monday but faces stiff opposition. The government, which owns around a quarter of the airline, has said it will not sell its shares, and the Aer Lingus board has rejected the offer.

 

A submission to the Irish Stock Exchange on Tuesday showed a group called Tailwind Nominees -- made up of Aer Lingus pilots -- bought 6.1 million shares at 2.90 euros, bringing its holding in Aer Lingus to 1.7 percent.

Another group, Irish Airline Pilots Pensions Limited, has also been building a stake and currently holds 2.3 percent of Aer Lingus, although Ireland's pensions regulator has voiced concerns with the pension fund's purchase.

 

The regulator noted last week that there were "clear regulations" requiring pension funds to avoid accumulating risk by ensuring investments are well diversified.

 

Irish Airline Pilots Pensions Limited bought most of the stake for 3.04 euros a share.

 

Shareholders have until November 13 to accept Ryanair's offer, which values Aer Lingus at EUR1.48 billion (USD$1.86 billion).

 

Key to the bid's success or failure will be the response of Aer Lingus's Employee Share Ownership Trust, which has a 12.6 percent stake and has yet to say whether it will back the bid.

 

(Reuters)

 

[Sandeep G 1]

Seems that Ryanair ain't playing around - this could be good news for the irish and Aer Lingus...

 

I would have thought the Irish govt. would welcome a good bid like that (if it is any good - i'm not too sure)... Are jobs at stake? any formal takeover proposal document to find out how exactly Ryanair will manage Aer lingus?

[Pieter C. 5]

October 25, 2006

Irish members of the European Parliament have expressed their concerns over Ryanair's planned EUR1.48 billion (USD$1.86 billion) takeover of Aer Lingus to Europe's competition chief.

 

The lawmakers met European Competition Commissioner Neelie Kroes on Wednesday and said afterwards she had shown understanding about their view that the deal could create a new monopoly in flights between Ireland and Britain.

One of the lawmakers, Eoin Ryan, said Kroes had told them that if the review of the proposed takeover is handled by Brussels -- as opposed to Dublin -- her staff would look specifically at the impact on Ireland, as well as EU aviation.

 

A spokesman for Kroes said she had said Brussels would look at the "horizontal effects" of the deal but had not been specific about the scope of the review, should it eventually be handled by regulators in Brussels.

 

The Irish government has said it wants a competition review of the deal to look at the impact on Irish aviation, as well as the European market as a whole, because it is concerned the merger would effectively create an Irish airline monopoly.

 

The government owns roughly a quarter of Aer Lingus.

 

The spokesman, Jonathan Todd, said Kroes had reminded her audience that it remains unclear whether the deal is big enough to be considered in Brussels, or is small enough for it to be reviewed by Ireland's competition authority.

 

Ryanair, Europe's biggest budget airline, launched a shock bid for Aer Lingus this month.

 

Lawmaker Ryan, who is a member of the ruling party in Ireland and sits in the Irish national parliament as well as the European Parliament, said he told Kroes the merged airline would control 80 percent of flights between Ireland and Britain.

(Reuters)

 

and, look at this:

 

October 26, 2006

Aer Lingus CEO Dermot Mannion has told staff the Irish carrier might have to make sweeping job cuts to help it compete with local rival Ryanair, whose takeover bid the Aer Lingus board opposes.

 

Local media reported on Thursday that Mannion told representatives of the company's 3,500 employees late on Wednesday it would need to make cutbacks if it wanted to survive competition from Europe's largest budget carrier.

 

Ryanair has already said it would expect "significant" job losses at Aer Lingus if its takeover bid, which values Aer Lingus at EUR1.48 billion (USD$1.87 billion), is successful.

 

A spokeswoman for Aer Lingus said Mannion -- whose group said at the time of its listing last month it planned to raise ticket prices rather than cut jobs -- had said during a staff meeting that job losses were a possibility.

 

"He did discuss openly that that could be a reality," she said, but stressed that current agreements with trade unions remained in place and the airline would hold intensive discussions with them before making any changes.

 

The group does not plan to make a formal statement.

 

News that Aer Lingus may cut staff numbers could help to lessen opposition to Ryanair's bid, which is also opposed by Aer Lingus's largest shareholder, the Irish government, which has a 25 percent stake.

 

"In the context of the current bid, the proposals from Aer Lingus may soften employee/ESOT (Employer Shareholder Ownership Trust) resistance to consideration of a -- raised we expect -- Ryanair offer," NCB analyst John Sheehan said in a research note.

 

"Employees could opt for crystalizing the value of their Aer Lingus holding in the short term through accepting the Ryanair bid. A key issue is likely to be the severance terms that would apply in the event of rationalization by either Aer Lingus or Ryanair respectively," he added.

 

Aer Lingus's share price has remained above the 2.80 euros a share Ryanair is offering ever since it launched the bid earlier this month, with the market speculating Ryanair would have to raise the offer to overcome resistance to the takeover.

 

Ryanair said in its offer document, published on Monday, that it carried 11,500 passengers per employee compared with just 2,500 at Aer Lingus.

 

"This demonstrates the extent of overmanning and inefficiency within Aer Lingus. Consequently there is an urgent need to continue the rationalization plans previously adopted by Aer Lingus management, and this will lead to further job losses in areas where overmanning remains prevalent," it said.

 

These included sales and marketing, ground handling, catering and administration, Ryanair added.

 

(Reuters)

 

[Pieter C. 5]

The Irish battle is raging and getting fiercer all the time; see this:

 

October 27, 2006

The war of words between Ryanair and takeover target Aer Lingus escalated on Friday as the latter said Ryanair had made "numerous misrepresentations" and its shares had underperformed.

 

Ryanair, which earlier this month launched a EUR1.48 billion euro (USD$1.87 billion) hostile bid to take over the rival Irish airline, said on Thursday that Aer Lingus staff had less reason to reject its offer, given reports of possible job cuts.

 

"The statement issued by Ryanair Holdings at 4.39 pm yesterday... contains a number of serious inaccuracies and misrepresentations," Aer Lingus said in a statement.

 

Europe's biggest budget airline said that members of Aer Lingus's Employee Share Ownership Trust (ESOT), which has a 12.6 percent stake in the airline, at least could expect to get EUR60,000 (USD$76,000) each by selling their shares to Ryanair.

 

ESOT then issued a statement, however, saying the EUR186 million (USD$235.7 million) it would receive if it were to accept Ryanair's offer would not stretch that far, given borrowing costs of EUR35 million (USD$44.4 million) after the exercise of an option to buy extra shares.

 

Employee members could expect to receive an average of EUR38,864 (USD$49,200) each, and former staff would get EUR13,915 (USD$17,600), it said, adding that it was still investigating Ryanair's claims that any gain made by ESOT members from selling their shares would be tax-free if they used the funds to buy Ryanair stock.

 

Unlike the government, which has said it will not sell its 25.35 percent stake, and a number of smaller Aer Lingus shareholders opposed to the bid, ESOT has yet to say whether it will accept it.

 

Aer Lingus management, which has said job cuts are possible if it is to stay independent and compete with Ryanair, again made its opposition clear on Friday.

 

"This purported tax-free status is highly conditional, dependent on Revenue approval and, extraordinarily, dependent on Aer Lingus employees and former employees going into the public markets and buying shares in Ryanair, a company whose stock has underperformed other European airlines during 2006," it said.

 

(Reuters)

 

[Pieter C. 5]

More news:

 

November 3, 2006

Ireland's Aer Lingus issued a detailed and forthright rejection of a takeover bid by low-cost rival Ryanair on Friday and urged its shareholders to snub an offer valuing it at EUR1.48 billion euros (USD$1.9 billion).

 

In a strongly worded letter to shareholders, Chairman John Sharman said Ryanair, Europe's biggest budget carrier, lacked the know-how to deal with unionized staff and reiterated the board's belief that the offer undervalued Aer Lingus.

 

He also stressed that cost cuts, which Ryanair says are badly needed at Aer Lingus, were already underway.

 

"Ryanair does not possess the appropriate experience in managing, and demonstrates a hostile attitude towards, a unionized work force and has no experience in managing a long-haul business," Sharman said.

 

Aer Lingus shareholders have until November 13 to accept Ryanair's 2.80 euros a share offer, a 27 percent premium to the price at which Aer Lingus listed just a week before the bid.

 

"The participating directors... believe that the Ryanair offer significantly undervalues Aer Lingus," Sharman said. "The way to reject the offer is to take no action. Do not sign any document which Ryanair or its advisers send you."

 

He said that faced with a strong, well-capitalized and independent Aer Lingus, Ryanair -- its main short-haul competitor -- had reacted in a hostile, anti-competitive move designed to eliminate a competitor at a "derisory price".

 

Sharman said new aircraft and more cost cuts would create significant future value for investors. "We are continuing to drive unit cost efficiencies and will write to you with details of our 2007 Process Improvement Programme in due course."

 

(Reuters)

 

[Pieter C. 5]

Things are heating up:

 

Ryanair Bides Its Time As Aer Lingus Shares Fall

 

November 11, 2006

There was no sign of Ryanair snapping up shares in Aer Lingus, traders said on Friday, despite a fall in the Irish airline's stock below the 2.80 euros a share Ryanair is offering for its Irish rival.

"As far as I'm aware he (Ryanair Chief Executive Michael O'Leary) has not been in the market," said one Dublin-based trader. "The volume doesn't suggest he's buying."

 

Local media reported that a share price fall to as low as 2.70 euros on Thursday and Ryanair's failure to buy up more shares showed Europe's biggest budget carrier might be getting cold feet over its EUR1.48 billion euro (USD$1.9 billion) bid.

 

Traders and analysts poured cold water on that view, however, saying that the lower the share price went the more it reinforced Ryanair's message to Aer Lingus staff shareholders that the stock will fall if the takeover offer fails.

 

Others pointed out that opponents of the bid, who have paid over 3 euros a share accumulating defensive stakes, may be less inclined to buy more given the losses they are carrying.

 

"If O'Leary lets the share price go lower, his bid looks better," the trader said. "Why would he buy?"

 

Pilots and businessman Denis O'Brien are among those to have bought shares in the former national airline in an attempt to thwart Ryanair's move while members of the Aer Lingus Employee Share Ownership Trust (ESOT), which has a 12.6 percent stake, look set to reject the offer in a ballot that closes on November 22.

 

"Ryanair already has a 19.2 percent stake and, pending a decision from EU competition authorities on the proposed takeover, it may suit Ryanair to see the share price trade lower, highlighting the value of their bid," said John Sheehan, analyst at NCB Stockbrokers in Dublin.

 

Announcing first-half results earlier this week, Ryanair said it did not expect the outcome of a review by European Union regulators until late December.

 

Sheehan also stressed he saw no sign Ryanair was about to give up on Aer Lingus but said he expected them to be patient.

 

"They're clearly very serious about it," he said. "We would not expect them to increase their bid any time soon. You'd be well into December if they decide to increase the offer."

 

Executives at Ryanair said on Monday they expected ESOT members to reject the offer, effectively scuppering it given that the government has said it will not sell its 25.35 percent stake.

 

They did not, however, say whether they would sweeten their terms although Sheehan believes that is the most likely scenario, assuming regulatory approval of a deal.

 

(Reuters)

 

[Pieter C. 5]

Will FR be successful in their bid for EI :

 

Ryanair Extends Aer Lingus Offer

 

November 14, 2006

Ryanair said on Tuesday it had extended the takeover period for its Aer Lingus bid after shareholders with less than 0.1 percent of shares in the airline accepted its 2.80 euros a share offer.

 

"Valid acceptances of the offer had been received in respect of 504,994 Aer Lingus Shares (representing... approximately 0.095 percent of the issued share capital of Aer Lingus)," Ryanair said in a statement.

 

The first deadline for Aer Lingus investors to accept an offer that values the former state airline at EUR1.48 billion (USD$1.9 billion) passed on November 13 but acceptance had not been expected to be high given opposition from key shareholders.

 

Ryanair, which is awaiting the result of a ballot on its offer among staff shareholders at Aer Lingus with a combined stake of 12.58 percent, said it had now extended the closing date for its offer until 3:00 p.m. British time on December 4.

 

The airline, which already holds 19.16 of Aer Lingus and has made its bid conditional on securing at least 50.1 percent, said it would not be able to make any revisions to its approach after December 8.

 

Executives at Ryanair have repeatedly refused to say whether they will offer more money to try to win a controlling stake although analysts expect they will, given the potential benefits of a deal and the level of opposition to the current offer.

 

The government has said it will not sell its 25.35 percent stake under any circumstances. Aer Lingus pilots and businessman Denis O'Brien have accumulated stakes in an attempt to block the bid.

 

(Reuters)

 

[Keith T 2]

I wonder what difference LiarAir will make to Air Fungus should it win control?

 

Be interesting to see the outcome. A much stronger LiarAir may well force down fares at the legacy carriers and encourage more and more carriers to go down the LCC path.

Edited November 14, 2006 by Keith T

[Pieter C. 5]

LiarAir will make to Air Fungus

 

Just LOVE these names

[Pieter C. 5]

Guess, it's finished for LiarAir :

 

Aer Lingus Employees Block Ryanair Bid:

 

November 22, 2006

Current and former Aer Lingus staff holding 12.6 percent of the airline rejected on Wednesday a takeover bid from budget carrier Ryanair, effectively ending the current approach.

 

Ryanair faced intense opposition to its planned takeover from management, staff and major shareholders and was not expected to get enough shareholders to accept it without raising the 2.80 euro per share offer.

 

But Europe's biggest budget airline said on Tuesday it would not increase the bid, which values Aer Lingus at EUR1.48 billion (USD$1.9 billion). Having said it will not raise the offer, Ryanair cannot bid again for the airline in the next 12 months.

 

Some 97 percent of the Employee Shareholder Ownership Trust (ESOT) -- the third largest shareholder in Aer Lingus after the Irish government and Ryanair -- who participated in the ballot voted to reject the offer.

 

"This is a ringing endorsement of the Union's call for the bid to be overwhelmingly rejected," Michael Halpenny, national industrial secretary for union SIPTU -- whose members make up around half of the Aer Lingus workforce -- said in a statement.

 

"The bid by Ryanair held nothing for the workers, the consumers or the airline, and its defeat is a rejection not only of Ryanair's employment practices but is a victory for common sense and consumer choice," he said.

 

O'Leary acknowledged earlier this month the current bid was unlikely to succeed without the support of the ESOT, a group of former and current Aer Lingus staff.

 

The Irish government, Aer Lingus's largest shareholder with 25 percent, said from the start it would not accept the offer.

 

Ryanair, which has a 19.2 percent stake, has said it will remain a long-term shareholder in its local rival if the bid fails.

 

Last week it extended to December 4 the period for shareholders to accept its bid after holders with less than 0.1 percent of shares in Aer Lingus accepted by the original November 13 deadline.

 

The ESOT said 3,224 ballot papers, representing 70 percent of those sent out, were received. Only three percent of those who returned their papers voted to accept the offer.

 

Under takeover rules, Ryanair can now raise its offer only if Aer Lingus receives a competing bid or if Aer Lingus management, which has rejected the offer, says it would be prepared to accept a higher bid.

 

Both scenarios are considered unlikely.

 

Once the offer lapses next month, Ryanair cannot make another offer for 12 months.

 

Aer Lingus's share price held above the 2.80 euro offer price for more than four weeks after the October 5 approach -- and at one point rose as high as 3.05 euros -- on expectations Ryanair would have to raise the bid.

 

But the shares have slipped back in the past two weeks amid thin trading. They were down 1.2 percent at 2.65 euros on Wednesday afternoon, but still well above their 2.20 euro listing price.

 

(Reuters)

 

Thursday November 23, 2006

 

Ryanair's bid for Aer Lingus appears to be dead following yesterday's overwhelming vote to reject the offer by members of EI's Employee Share Ownership Trust, which holds 12.58% of the flag carrier. The SIPTU and Impact unions reported that 97% of voting ESOT members opted to oppose the bid on a 70% turnout. The Irish government already has indicated it will not sell its 25.35% stake. Ryanair holds 19.16%. The bid is conditional on securing at least 50.1%.

 

Impact, which represents EI cabin crew, pilots and "middle managers," said the takeover "would have led to massive job losses, intolerable working conditions and a near monopoly on air travel from Ireland to key destinations." The vote came a day after Ryanair CEO Michael O'Leary confirmed the LCC's intention to keep its bid at €2.80 ($3.59) per share

 

[Sandeep G 1]

Man, with the number of hostile take-overs around the world, it's very interesting to see how they all pan out. Wonder if RyanAir will launch another bid, perhaps with some employment guarnatess for present employees of AerLingus this time attached????

[Pieter C. 5]

It was a nice try, but, apparently failed:

 

Ryanair's Aer Lingus Bid 'A Long Shot'

 

November 30, 2006

Ryanair's EUR1.48 billion (USD$2 billion) bid for Irish carrier Aer Lingus has little chance of succeeding, the budget airline's chief financial officer conceded on Thursday.

 

"We believe, at this stage, it is a long shot," Ryanair Chief Financial Officer Howard Millar told The Future of Air Transport conference in London.

 

"The possibility is about the same as England winning the Six Nations (Rugby Union tournament) next year," he said.

 

England's rugby team have lost eight of their past nine games and their coach stood down on Wednesday following the dismal performances.

 

Two key shareholder blocks, with around 40 percent of Aer Lingus, have formally rejected the 2.80 euro-a-share bid for the former state carrier.

 

Ryanair has set a deadline of December 4 for shareholders to accept its bid, which faced an uphill battle from the start.

 

The Irish government, which has a 25.4 percent stake in Aer Lingus and is its largest shareholder, said from the outset it would not sell its stake.

 

Last week, a trust of current and former Aer Lingus employees, which is the company's third largest shareholder with 12.6 percent, also rejected the bid.

 

Millar said the level of acceptances so far was small and that Ryanair was not expecting to get enough of the remaining shareholders to back the bid in order for the carrier to secure the controlling stake it wants.

 

However, Europe's largest budget airline does plan to remain a long-term shareholder.

 

On Wednesday, Ryanair confirmed it had raised its stake in Aer Lingus to 25.2 percent, giving it the right to vote down resolutions and, given the government's "no-sale" position, effectively blocking anyone else from making an approach.

 

"It puts us in a position where we have taken up a bit more of the slack and it makes it difficult for anyone else to come in," Millar said.

 

Ryanair can keep buying shares in Aer Lingus until its stake reaches 29.9 percent. Millar said he did not know if Ryanair would do so but it would make the decision in the next year.

 

The European Commission said on Thursday it had delayed a decision on Ryanair's planned purchase of Aer Lingus to December 20 from December 6 to consider possible remedies to competition fears.

 

Millar reiterated the company's view that Ryanair's yields would rise by two to three percent in the third quarter, and said the group was benefiting from a fall in the US dollar, in which its fuel and maintenance costs are denominated.

 

(Reuters)

 

[Pieter C. 5]

Ryanair Extends Aer Lingus Share Offer

 

December 5, 2006

Ryanair on Tuesday extended the deadline for Aer Lingus shareholders to accept its takeover offer, but the bid, which less than 1 percent of investors have accepted, still looks set to fail.

 

Ryanair said that as of December 4, when the latest deadline expired, shareholders with nearly 5 million shares -- or 0.93 percent of Aer Lingus -- had accepted the offer, which values Aer Lingus at EUR1.48 billion euros (USD$1.97 billion).

 

That was an improvement on the 0.1 percent of the airline Ryanair had secured by its first deadline on November 13 but still leaves the carrier, which already owns 25.2 percent of Aer Lingus shares, well short of the controlling stake it wants.

 

Ryanair said in a stock exchange statement it had now set a final deadline for shareholders to accept its offer of 1:00 p.m. on December 22.

 

The current bid for at least 50.1 percent of Aer Lingus is widely expected to fail given intense opposition from major shareholders such as the Irish government with 25.35 percent and current and former Aer Lingus staff with 12.6 percent.

 

Ryanair itself has said the chances of its bid succeeding are slim but it is likely to want to keep the process moving forward until European competition authorities deliver their verdict which is due by December 20.

 

The company has said it intends to remain a major shareholder in Aer Lingus and that it may make another bid in the future.

 

Separately Ryanair said on Tuesday that it carried 3.16 million passengers in November or 15 percent more than in the same month last year but that its planes were not as full as in 2005. Its load factor was 79 percent versus 81 percent in November last year.

 

(Reuters)

 

[Pieter C. 5]

Ryanair Offer For Aer Lingus Over -- For Now

 

December 20, 2006

A take-over bid by Europe's largest low-cost airline Ryanair for fellow Irish airline Aer Lingus ended on Wednesday after European competition authorities decided to examine the deal further.

 

But Ryanair said it intended to make a second offer if the European Commission gave its go-ahead for the deal following the extended investigation.

 

The deal had been expected to fail in any case this time around due to opposition from key Aer Lingus shareholders. They had been given until December 22 to accept the offer, which values Aer Lingus at EUR1.48 billion (USD$1.95 billion).

 

The European Commission decided on Wednesday to open an in-depth -- or Phase II review -- of the proposed deal after competitors and customers said the initial package of remedies offered by Ryanair did not meet their competition concerns.

 

"Following today's decision of the European Commission to refer the acquisition of Aer Lingus to Phase II, Ryanair's offer lapses... with immediate effect and all acceptances of the offer received to date are void," Ryanair said in a statement.

 

"Ryanair also announces that in the event of European Commission clearance following its Phase II review, Ryanair intends to make a further offer for Aer Lingus," it added.

 

Making a second offer would require take-over Panel consent since it would fall within 12 months of Ryanair's first offer.

 

The Commission said although Ryanair submitted an improved proposal on competition remedies at a late stage, there was not enough time to decide if it solved problems raised by the deal.

 

"The proposed acquisition would raise serious competition concerns in the passenger air transport sector and in particular could reduce choice for consumers and could give rise to higher fares than would be likely if the two carriers remained separate," it said in a statement.

 

The new deadline for a decision is May 11.

 

Chief Executive Michael O'Leary said Ryanair did not accept the Commission's argument that it did not have sufficient time to consider Ryanair's proposed remedies to competition issues.

 

"Ryanair is aware that in previous airline consolidations the final remedies were still being tested and negotiated between the airlines and the European Commission the night before the decision was due," he said in a statement. "This was particularly so in the case of the Air France-KLM merger."

 

O'Leary said the decision to refer the take-over to a Phase II probe flew in the face of the European Commission's stated policy of encouraging consolidation amongst European airlines.

 

"Given that much larger airline consolidations have been approved under the Phase I process, it is difficult to understand the Commission's failure to follow its own stated strategy of promoting airline consolidation by granting Phase I approval in this case," he said.

 

However, he said Ryanair was confident its offer would win EU competition approval under the Phase II procedure.

 

Aer Lingus shareholders had been given until Friday to accept Ryanair's 2.80 euro per share offer but two of the group's three largest shareholders had already refused to sell.

 

The Irish government, which owns around a quarter of Aer Lingus shares and is its biggest shareholder, said it would not sell its stake under any circumstances.

 

Aer Lingus's Employee Share Ownership Trust (ESOT), which has nearly 13 percent of the stock, also rejected the offer.

 

Ryanair is Aer Lingus's second largest shareholder.

 

Ryanair and Aer Lingus account for most take-offs and landings at Ireland's Dublin Airport. They fly 500 routes around Europe carrying more than 50 million passengers annually but compete on only 17 routes, in particular those to Britain.

 

(Reuters)

 

[Pieter C. 5]

More Ryanair 'news' :

 

Ryanair Takes Legal Case Over French Decree

 

January 3, 2007

Irish budget airline Ryanair said on Wednesday it had filed legal action against the French government over what it said was an unlawful decree recently adopted in the country.

 

Europe's biggest no-frills carrier said the decree tried to force foreign airlines to apply French labor laws when basing aircraft in France and contravened European laws on the free movement of labor and services.

 

"This decree is contrary to the European free market for airline services and is a clear attempt to protect Air France from competition," Ryanair said in a statement.

 

The decree was designed to discourage foreign airlines from establishing a base of operations in France, it said. Ryanair said in May it would open its sixteenth European base in the southern French city of Marseille, basing 2 aircraft there.

 

Ryanair said it had also filed a complaint with the European Commission calling on it to overturn the decree.

 

The French government was not available to comment on the move by Ryanair.

 

(Reuters)

 

Apparently, they've to pay more for their French employees, than according to Irish rules/taxes