Government Looks Seriously At Aer Lingus Offer

The Irish Finance Minister Brian Lenihan (pictured) is said to be having a "serious look" at a fresh multi-million euro offer for Aer Lingus from its rival Ryanair - even though the airline itself has publicly ruled the bid out.

Ryanair boss, Michael O'Leary has been actively trying to take over Aer Lingus for sometime, offering €1.5 billion for the airline just two years ago.

In his most recent offer however, Mr O'Leary has chopped his offer by half, to €750 million.

Aer Lingus is currently embroiled in a series of cost-cutting initiatives and is working with the trade unions in an effort to agree job losses to face up to an expected major shortfall in turnover for this year.

Compounded by a less than healthy bank balance, the government is therefore said to be considering the offer - even though it's much less thanm previously on the table.

Government currently holds a 25% share in the airline and would make €188 million from the proposed deal, but according to reports, some ministers are saying the offer needs to be much higher.

To add to the confusion this time round, Aer Lingus itself yesterday rejected what it described as a "hostile takeover bid from Ryanair", dismissing the offer as significantly undervaluing the airline.

However, Finance Minister Brian Lenihan and his colleague, Transport Minister Noel Dempsey, are expected to meet Mr O'Leary to discuss his plans in the near future, as the possible deal seems increasingly likely.

However, the cut-price deal would be a severe embarrassment as the original €1.5 billion deal had been rejected as even then it "seriously undervalued the company".

Making the offer, Ryanair's millionaire boss Michael O'Leary said: "The world has changed dramatically over the past two years, as high oil prices and deep recession have caused a flood of airline bankruptcies, consolidations and capacity cutbacks."

Ryanair already owns 29.82% of Aer Lingus with other major shareholders including the Irish government and Aer Lingus employees, both of which rejected the takeover offer last time.

On Monday, before the offer was rejected, Ryanair shares closed down 4.8% at €2.78. Aer Lingus shares were up 13.6% at €1.27.

Ryanair Flies Into Takeover Turbulence

(DW)