The Aer Lingus board has rejected Ryanair’s €748m (£619m) takeover bid saying the offer significantly undervalues the business. The offer, made yesterday (December 1), is half the £1bn bid Ryanair made two years ago.
The budget airline, which already owns 29.8% of Aer Lingus, proposed the move in a bid to “bring one strong Irish airline group under common ownership”.
In a statement, Aer Lingus says that the new “lower offer was not capable of completion” and strongly advised its shareholders to reject the offer. It added that Aer Lingus still has “significant cash reserves and a robust long term future”.
Ryanair’s previous bid for Aer Lingus, made in 2006, was rejected by the European Commission on competition grounds.
Ryanair has said that it would retain the two brands if a deal went ahead and the airlines would continue to operate as separate companies. However, it says its combined financial strength would help it better compete with British Airways, Air France and Lufthansa.
While Ryanair owns nearly 30% of Aer Lingus, another 25% belongs to the Irish Government, and 12% to members of a employee share ownership trust, both of which resisted the first bid.