Ryanair offer for Aer Lingus unlikely to succeed
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Ryanair Holdings Plc’s bid to buy Aer Lingus Group Plc will probably be thwarted by regulators concerned that a tie-up would give Europe’s largest discount carrier too large a share of the Irish market, NCB Stockbrokers said.
“A Ryanair-Aer Lingus combination would control 83 percent of short-haul seats from Ireland,” NCB analyst Neil Glynn wrote today in a note to investors. “We expect that competitive issues will remain too great an obstacle for the Irish government and regulators to clear.”
Aer Lingus, Ireland’s second-biggest airline, rejected Ryanair’s 1.40 euro-a-share bid yesterday, saying the low-cost carrier’s second offer in two years is too low. Ryanair, the biggest Aer Lingus shareholder with 29.82 percent, would pay 524 million euros for the rest.
Ryanair Chief Executive Officer Michael O’Leary is reviving takeover efforts as airlines across Europe seek combinations as they struggle with waning demand. European Union regulators blocked Ryanair’s initial attempt to buy Aer Lingus because of concern that combining the two Dublin-based airlines would lead to a monopoly on 35 routes.
Aer Lingus rose 1 cent, or 0.8 percent, to 1.29 euros in Dublin trading as of 10:12 a.m. after surging 14 percent yesterday. Ryanair was unchanged after falling 4.8 percent yesterday. (Bloomberg)
- Colm Heatley
