DUBLIN – Staff at Aer Lingus support the airline remaining independent despite the 750 million euro ($995 million) takeover bid by rival Ryanair, Chief Executive Dermot Mannion said on Sunday.
Aer Lingus’s board has rejected Ryanair’s (RYA.L: Quote, Profile, Research, Stock Buzz) all-cash bid of 1.40 euros a share, saying it significantly undervalued the airline.
Europe’s biggest budget carrier, which already has a near 30 percent shareholding in Aer Lingus, has tried to appeal directly to the government and employees, holders of more than 25 percent and 14 percent of the former state carrier.
“I have had tremendous messages of support from staff right across the organisation — all of whom are hugely positive about this notion of continuing the path of Aer Lingus as an independent organisation going forward,” Mannion told public broadcaster RTE on Sunday.
The Sunday Independent newspaper quoted Irish billionaire Denis O’Brien, who has over a 2 percent stake in Aer Lingus, as telling an investment forum last week that he opposed any Ryanair effort to take over its rival.
O’Brien was not immediately available for comment.
The government has said it awaited Ryanair’s offer document.
Mannion said it was talking to all of its shareholders and met with the government last week, adding that the state would make its decision “in its own good time”.
“Once we receive the formal offer from Ryanair, it may come some time this week, we will then respond with a document. It is called a defence document,” Mannion said.
“It will be a very positive, affirmative document that will set out an independent strategy for long-term growth on shorthaul and on longhaul in the business. That I believe is what all of stakeholders want to see and want to hear.”
Aer Lingus (AERL.L: Quote, Profile, Research, Stock Buzz) Chairman Colm Barrington was quoted in a newspaper interview on Friday as saying he would seek a friendly investor to take a majority stake in the airline.
Mannion said in response on Sunday: “The Aer Lingus business is not for sale. We have set out an independent strategy going forward and we are going to stick to just that.”
Ireland’s Takeover Panel on Friday ruled out elements of Ryanair’s offer, saying pledges to give the state control over Aer Lingus’s valuable landing slots at London Heathrow, and to provide bank guarantees to cut the carrier’s fares and abolish fuel surcharges, would favour the government.
The panel also said Ryanair should drop promises to recognise trade unions at Aer Lingus and restore flights between Shannon in the west of Ireland and Heathrow — unless it can clarify to whom the pledges have been made and that they meet takeover rules.
Ryanair said the commitments were designed to reassure all stakeholders including employees, consumers and the government, adding it would proceed with the offer in a form “consistent with the constraints imposed by the Irish Takeover Panel”.
Unions, who are not recognised at Ryanair, have rejected the guarantees and remain concerned over job prospects.
Ryanair’s chief executive, Michael O’Leary, is expected to appear before a parliamentary committee on Thursday to outline its proposals for Aer Lingus.
Ryanair tried to buy Aer Lingus for double the price of its current bid in 2006, but was thwarted by an EU ruling that said it would create a near monopoly in European flights out of Dublin.
Analysts say other proposed industry consolidation moves could give Ryanair a greater chance of success this time around in getting its offer past European competition authorities.