Aer Lingus takeover saga coming to an end as O'Leary agrees to sell
While Michael O'Leary finally accepted on Friday that he will now not take over Aer Lingus - when the announcement was made that Ryanair was willing to sell its shares to IAG - it was one of those special moments.
The low-fare airline's colourful chief executive, who has been so outspoken on Aer Lingus over the years, could not resist pointing out the two airlines' relative places in the pecking order.
"In late 2006 when Ryanair first bid for Aer Lingus, Ryanair with 36 million passengers carried four times the Aer Lingus traffic of nine million. Today Ryanair (with over 100 million passengers) carries more than 10 times the Aer Lingus traffic (of 10 million). And we will continue to deliver the vast majority of Ireland's traffic and tourism growth in the coming months and years," he said.
The news that the board of Ryanair has voted unanimously to accept IAG's €2.55 per share offer, valuing the former state airline at €1.36bn, brings to an end one of the most protracted takeover bids in Irish business history.
The news leaves the way clear for the deal to be approved by the EU Competition Authority and for IAG to begin its takeover of Aer Lingus at the EGM on July 16. It will mean that both Ryanair and Aer Lingus will be in a position to focus on their core businesses - which will ultimately be good for them both, according to David Holohan, head of research at stockbroking firm Merrion.
"This brings a rather quiet end to quite a tumultuous relationship between Ryanair and Aer Lingus. And while Ryanair has made a quite modest profit - given what they have put into purchasing Aer Lingus shares over the last nine years, and receiving about €400m once the deal completes - it may be a disappointment for Michael O'Leary personally as he had very big plans for Aer Lingus under Ryanair's ownership," he said.
Whatever the disappointment for Michael O'Leary personally, an end to the nine-year attempt to take over Aer Lingus may come as a relief to other senior executives and staff at Ryanair.
Many industry insiders believe that the protracted takeover deal took focus away from Ryanair's core business and it may not be a coincidence that Ryanair's 'Always Getting Better' plan, which has seen the company soar to new heights, commenced once it became apparent that Ryanair would not be permitted to take over at Aer Lingus.
This refocus of the business model has seen Ryanair's full-year profits up 66pc with passenger numbers up 11pc in the same period.
It's an analysis that Holohan broadly agrees with.
"For Ryanair as a whole, I think it served as a distraction from their overall growth ambitions, which are much, much bigger than Aer Lingus's could ever have been," he said.
The €400m may be a welcome addition to the company's cash reserve - but it is unlikely to make much of an impact on year-end results. Such is the scale of Ryanair that the amount it will receive in cash and dividends from IAG isn't the boon that it would be for most companies.
Ryanair declined to comment on what its plans were for the cash it will receive in return for its Aer Lingus shares, but it raises the possibility of some generosity in terms of share buyback and dividends, which have become more common in recent years.
Holohan believes that ultimately the deal is good for both parties in the separation. Aer Lingus, he believes, will benefit from being part of a much larger airline network, and will relish the possibility not just of competing against Ryanair for the first time in almost two decades, but also growing its long-haul business out of Ireland.
"It is also good from an Aer Lingus perspective, being part of a much bigger airline group is a very positive move for them. They will now be able to offer significantly more destinations through the IAG network than they simply would be as a standalone," Holohan said.
While O'Leary may have finally accepted that he will not takeover Aer Lingus, the airline industry's original big personality - Virgin boss Richard Branson - is unlikely to be happy with the news that IAG is now set to takeover Aer Lingus.
Earlier this year Branson said that he found it "incredible that the competition authorities allow such things to happen".
While Branson may rankle that IAG, who already dwarf Virgin Atlantic's presence at Heathrow are set to add even more slots to their roster, it now looks inevitable that the EU's Competition Authority will rule positively on the deal next week.
Sunday Indo Business