In a stock exchange disclosure, IAG has confirmed that it had “submitted a proposal” to make bid for Aer Lingus, adding though that it had been “rejected by the board of Aer Lingus,” continuing to say that “There can be no certainty that any further proposal or offer will be forthcoming. A further statement will be made if and when appropriate.” Aer Lingus’ Board, headed by chairman Colm Barrington, responded by saying in a stock market disclosure that “The board has reviewed the Proposal and believes that it fundamentally undervalues Aer Lingus and its attractive prospects. Accordingly, the Proposal was rejected on 16 December 2014”. Aer Lingus also stated that “Shareholders are strongly advised to take no action.” The bid is understood to be in excess of €1bn, while shares in Aer Lingus at one point rose over 21% on the news, closing yesterday 9% higher.
The move for Aer Lingus has been described as “highly opportunistic” by David Holohan, Head of Research at stockbroking firm Merrion Capital, based primarily on the fact that the airline is losing a highly respected Chief Executive in Christoph Mueller who is moving to troubled Malaysia Airlines next year. The airline is also struggling to settle a pension dispute that has been a cause of much industrial unrest at the airline. The Irish Government own a 25.1% stake in Aer Lingus, while Ryanair, who have made three separate attempts to acquire the airline, are awaiting the result from the UK Court of Appeal regarding a decision forcing them to reduce their stake in the airline from 29.8% to 5% which is due any day, but which may be delayed until January.
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AviTrader Publications Corp.
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Canada