Panel says Ryanair broke rules in bid offer
Ryanair's Michael O'Leary outlined a new ?748m offer for Aer Lingus last week, offering guarantees to entice major shareholders to sell. Aer Lingus chairman Colm Barrington said yesterday he would welcome an approach by another investor to take an Aer Lingus stake in an effort to block the Ryanair bid
RYANAIR has been forced to withdraw a number of key undertakings it specifically gave the Government last week in relation to its fresh €748m bid for Aer Lingus, after the Takeover Panel yesterday ruled the low-cost carrier had breached its rules governing offers to shareholders.
Ryanair had informed Minister for Transport Noel Dempsey that if it was successful in its takeover battle for Aer Lingus it would grant the Government control of landing slots in Heathrow owned by the former state-owned carrier.
It also pledged to set aside €100m to reduce Aer Lingus fares by 5pc over a three-year period.
Guarantee
Additionally, Ryanair, which owns nearly 30pc of Aer Lingus, said it would provide a €100m guarantee to eliminate Aer Lingus fuel surcharges. Aer Lingus yesterday announced it would eliminate those surcharges with immediate effect.
The Takeover Panel said that Ryanair's assurances to the minister breached its rules because all shareholders in Aer Lingus must be treated equally, and that the undertakings constitute arrangements made with an Aer Lingus shareholder "containing favourable terms which were not being extended to all Aer Lingus shareholders". The Government, through the Minister for Finance, owns a 25.1pc stake in Aer Lingus
Those specific undertakings to Mr Dempsey made by Ryanair cannot now be included in their original form in its formal offer document, which is due next week.
However, Ryanair said it intends to proceed with its proposed offer, including the delivery of the guarantees, "in a form consistent with the constraints imposed by the Irish Takeover Panel".
Ryanair yesterday said that it "strongly disagrees" with the Takeover Panel's assessment and claimed the assurances relayed to the minister were given in terms of his capacity as custodian of national aviation policy, and not as an Aer Lingus shareholder.
The Department of Transport said that Ryanair representatives made no such distinction at their meeting.
Aer Lingus chairman Colm Barrington said yesterday that he would welcome an approach by another investor interested in taking a stake in Aer Lingus to block Ryanair's bid. He also claimed Ryanair boss Michael O'Leary couldn't be believed in relation to his undertakings.
Mr O'Leary told the Irish Independent that he did not believe it would be helpful or appropriate to engage in personal attacks and that Ryanair's focus remained on the future of Irish aviation.
NCB analyst Neil Glynn said that the Takeover Panel's ruling was only a technical issue for Ryanair in relation to its bid.
He also expressed surprise that Aer Lingus had decided to eliminate its fuel surcharge rather than reducing it, but said the carrier remained well-capitalised and had a significant cash position.
- John Mulligan
