Ryanair Says Revolutionary Antitrust Offer Should Win Aer Lingus
Ryanair Holdings Plc (RYA) Chief Executive Officer Michael O’Leary said Europe’s biggest discount airline has offered a “revolutionary” package of remedies to help win antitrust approved of its bid for Aer Lingus Group Plc. (AERL)
Ryanair’s bid should be approved by European Commission regulators if their decision follows the same principles that led to the approval of deals including BA parent International Consolidated Airlines Group SA (IAG)’s acquisition of BMI, O’Leary said in an interview at the company’s annual investor meeting.
The EC last month began a full probe of Ryanair’s 694 million-euro ($902 million) bid for Aer Lingus, in which it already has a 29.8 percent stake. An initial review showed the two Dublin-based airlines were direct rivals on a large number of European routes, the regulator said on Aug. 29.
“If the commission turns down this remedies package then we would have to seriously consider exiting our investment in Aer Lingus, which will without question result in Aer Lingus being broken up,” O’Leary said. “If we get rid of our investment the government will be facing a share price of about 60 cents.”
Aer Lingus rose 1.8 percent today to close at 1.05 euros in Dublin, 25 cents below Ryanair’s offer price of 1.30 euros. The stock has added 65 percent this year following the takeover bid.
Ryanair, which has added 23 percent in 2012 for a market value of 6.43 billion euros, said Sept. 4 it could exit all 46 Dublin routes that overlap with Aer Lingus to help win approval for the acquisition. The airline’s proposals are so favorable that “multiple airlines” have expressed an interest in competing at airports including Dublin, Cork, Shannon and Knock, he said.
O’Leary said that “nobody else wants to buy Aer Lingus,” and that Abu Dhabi-based shareholder Etihad Airways has made no offer for Ryanair’s stake. Should a bid be forthcoming it would be considered, he said, just as would any “very generous offer” for Ryanair itself.
European Union regulators blocked Ryanair’s bid for Aer Lingus in 2007, saying a combination would allow the discount airline to dominate 35 routes and control 80 percent of the market in Dublin. Ryanair lost a 2010 appeal of the merger ban.
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