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Ryanair's hostile takeover bid for Aer Lingus drives both shares higher

Ryanair's hostile takeover bid for Aer Lingus drives both shares higher

Shares in both Ryanair Holdings PLC and Aer Lingus Group PLC were higher Friday as investors gambled that Ryanair's hostile takeover bid for its Irish rival would produce a higher offer.
Aer Lingus shares closed 2.8 percent higher at euro2.98 (US$3.76) _ a 35 percent premium to the airline's euro2.20 IPO price Sept. 27, and 6 percent above Ryanair's euro2.80-per-share offer Thursday that stunned the Irish government, investors and Aer Lingus chiefs.
Ryanair said it had acquired 19.2 percent of Aer Lingus shares as of Thursday night, but Ryanair was excluded from Friday's dealing because, under terms of takeover law, it cannot buy shares priced over its offer price of euro2.80.
Analysts agree that the airline, which has rapidly expanded across Europe but never mounted such an ambitious takeover bid before, certainly could afford to raise its offer, because it has cash reserves exceeding euro2 billion (US$2.6 billion).
While analysts are divided on the merits of acquiring Aer Lingus for Ryanair, shares in Europe's leading no-frills carrier also rose 1.5 percent Friday to close at euro8.80 (US$11.09).
The government, which privatized the previously state-owned carrier to give it the freedom to grow, have retained a stake exceeding 28 percent that it won't sell. Ryanair CEO Michael O'Leary says he wouldn't mind having the government as a minority holder, because Ryanair's bid requires only 50.1 percent share ownership to succeed.
However, regulatory hurdles loom both in Ireland and at the European Commission. Analysts say competition authorities probably would order both airlines to surrender lucrative slots at Dublin airport to British no-frills competitors, which currently have found it impossible to crack the Republic of Ireland market. Also likely to be relinquished would be slots at Ryanair's main London base, Stansted, and Aer Lingus' main London hub, Heathrow.
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On the Net:
http://www.flyaerlingus.com
http://www.ryanair.com


Updated : 2021-08-04 03:58 GMT+08:00