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Ground crew are seen parking an Aer Lingus Airbus A320
at Dublin Airport.

Aer Lingus rejects revised approach from BA

LONDON, January 10, 2015

The owner of British Airways said on Friday that Aer Lingus (AERL.I) had rejected a revised takeover approach that valued the Irish airline at 2.40 euros ($42.83) per share.

International Consolidated Airlines Group (IAG), which also owns Spanish carrier Iberia, said it had lifted its cash offer from an earlier 2.30 euros.

"There can be no certainty that any further proposal or offer will be forthcoming," the IAG statement said.

But investors seemed to expect IAG to go further, with the stock price ending up 10 per cent at 2.50 euros.

A spokesman for Aer Lingus said it did not plan to comment on the IAG statement.

Aer Lingus in December rejected a takeover approach from its larger rival, a competitor for flights between Dublin and London, one of the world's busiest international routes. It said the offer undervalued the business.

Buying Aer Lingus would give British Airways more take-off and landing slots at Heathrow, its home base and a top European hub for profitable long-haul routes. The airport is operating at close to capacity, preventing BA from adding more flights.

IAG's Irish chief executive, Willie Walsh, knows Aer Lingus well. He started his career as a pilot there and was the former national carrier's chief executive between 2001 and 2005.

Walsh spent most of Friday afternoon in a private room at Dublin's Convention Centre, where he was speaking at a "self-empowerment summit."

In a speech sprinkled with jibes at rival Ryanair, he championed airline consolidation and IAG's multiple-brand strategy, but declined to comment on the Aer Lingus bid when approached by journalists.

Any acquisition of Aer Lingus would need the backing of budget airline Ryanair (RYA.I), which holds a 29.9 per cent stake in Aer Lingus after three failed takeover attempts, and the Irish government, which owns 25 per cent. – Reuters




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