Ireland - Ryanair Holdings' board voted to accept an offer from IAG SA for its 29.8 percent stake in Aer Lingus Group, removing one of the last hurdles in the British Airways owner’s quest to add the Irish carrier to its portfolio.
The board “believes that the current IAG offer maximises Ryanair shareholder value,” the Dublin-based company said in a statement Friday. Ryanair said it will now vote in favour of IAG’s offer at a July 16 meeting of Aer Lingus shareholders.
IAG CEO Willie Walsh won over Irish lawmakers for his 1.4 billion-euro ($1.52 billion) offer in May. Walsh, who was once an Aer Lingus pilot and also served as its CEO, negotiated with government representatives to calm concerns, securing acceptance for his offer of 2.50 euros in cash for each share Aer Lingus, plus a 5 cents dividend.
“We believe the IAG offer for Aer Lingus is a reasonable one in the current market,” Ryanair CEO Michael O’Leary said. “The price means that Ryanair will make a small profit on its investment in Aer Lingus over the past nine years.”
Aer Lingus rose as much as 2.9 percent and was trading 1.7 percent higher at 2.46 euros as of 8:27 a.m. in Dublin. Ryanair was priced up 1.8 percent at 12.40 euros, valuing the company at 16.8 billion euros, and IAG was up 2.2 percent.
Regulatory Block
Ryanair’s acceptance of the IAG offer will also end the saga of its own attempts to purchase its biggest Irish competitor, with successive bids blocked by European Union anti- trust regulators.
The discount carrier was also facing a requirement to reduce its stake to no more than 5 percent from the UK’s Competition and Markets Authority, which ruled in April that the 29.8 percent holding gave it too much control over a rival.
Ryanair said that the stake has been available for sale since May 2012.
Ryanair made a 694 million-euro bid for its Irish rival about two years ago after building up its holding over a number of years.