New blow in O'Leary bid to grab control of Aer Lingus
MICHAEL O'Leary has suffered a fresh blow in his efforts to take control of Aer Lingus after EU watchdogs shot down his third attempt to buy the airline.
The European Commission said it intends to block the airline's €694m bid for the former flag carrier because it would reduce competition for Irish travellers.
While consumers and the Government breathed a sigh of relief at the news, Ryanair said it "won't just walk away" from its investment in Aer Lingus and would appeal the decision in the European courts.
That raises the prospect of legal proceedings in Europe that could drag on for years.
The airline lashed out at the EU move to block its bid, describing it as "clearly a political one" that is designed to "meet the narrow, vested interests of the Irish Government and is not based on competition law".
"We haven't spent €400m investing in Aer Lingus to just walk away from it," Ryanair deputy chief executive Howard Millar told the Irish Independent.
"We won't be shy and retiring about this. We gave it our best shot but they've told us no twice now in no uncertain terms. We thought we had a fair chance," he said. "There will never be the likes again of the remedies we've proposed."
The ruling comes as a massive blow to Ryanair and chief executive Michael O'Leary.
Over the past number of months Ryanair has been pulling out all the stops to try to ease competition concerns and persuade the European Commission that it should be allowed to pursue a takeover of Aer Lingus.
But at a meeting yesterday morning, the Commission's competition watchdogs told Ryanair that they intend to block the latest attempt to buy Aer Lingus.
A formal announcement will be made by the Commission by March 6.
The ruling will also reignite a UK competition probe that could ultimately force Ryanair to sell its near 30pc stake in Aer Lingus.
Despite preparing to battle the refusal from Brussels in court, Mr Millar said that Ryanair wouldn't rule out selling its Aer Lingus stake if the right kind of offer was made.
"If somebody puts an offer down, if Etihad made an offer we couldn't refuse for example, well clearly we'd have to consider it," he said.
Abu Dhabi-based Etihad already owns almost 3pc of Aer Lingus.
"We don't want the bottom-fishers or carpet baggers," he added.
Trade unions representing Aer Lingus staff, including Impact and Siptu, remained tight-lipped yesterday, declining to comment on the European Commission's position.
Transport Minister Leo Varadkar, who had indicated before Christmas that the Government would not be selling its 25.1pc stake in Aer Lingus to Ryanair, yesterday said that the remedies package proposed by Ryanair "has not satisfied the Government's concerns about connectivity, competition or employment".
He said the offer, which involved breaking up the airline and giving parts of it to British Airways and Flybe, was "a strange way of achieving competition".
"If I were a Ryanair shareholder I would be very concerned about what they have spent on this takeover offer. Why are Ryanair burning the money of shareholders?"
Aer Lingus insisted that the reasons for blocking the latest Ryanair bid are "even stronger" now than when previous offers were made.
"Therefore, it was and remains Aer Lingus's position that the offer should never have been made," it said.
Mr O'Leary has claimed that Aer Lingus faces being split up if Ryanair is blocked from acquiring it.
Last year he said Ryanair had received approaches from a number of financial institutions interested in acquiring its Aer Lingus stake and breaking up the airline.
"If the Commission turns down this remedies package, then I think we would have to seriously consider exiting our investment in Aer Lingus, which will without question result in Aer Lingus being broken up," Mr O'Leary said, following Ryanair's annual general meeting last year.