IS Michael O'Leary a buyer or a seller? The sudden bid for Aer Lingus from the Ryanair chief has certainly titillated otherwise boring stock markets in recent days.
Most of the usual suspects -- the po-faced analysts, the serious commentators and even self-important political experts -- have been solemnly pontificating on the value of the bid. Hours of airtime and newsprint have been wasted measuring up the merits of O'Leary's latest escapade.
Meanwhile, the European Commission is shaping up to kill it dead.
The poor Cabinet was shell-shocked. Transport Minister Leo Varadkar, the macho man who had rashly declared that he would not accept a red cent less than €1 a share for the Government's 25 per cent Aer Lingus stake, was wrong- footed. Last week Leo needed time to equivocate about a Ryanair offer of €1.30 a share -- a full 30c higher than his €1 figure.
Back in the Dail, Enda Kenny was dazzled. He was "concerned" at the implications of the offer. He insisted that "competition, consumer facilities relating to price and access to the country" were vital considerations. Then he protested that he could do nothing on God's earth to block the bid. If he is really such a political eunuch, why was he waffling on about bigger issues than mere price?
The Aer Lingus board did what Aer Lingus boards have always done best. Nothing much.
Then they issued the ritual statement declaring that O'Leary's bid "undervalued" their company. They advised shareholders to do what Aer Lingus boards do best: nothing.
After they had called endless top-level meetings to consider their response, Michael was spotted laughing all the way to the canteen.
Other airlines waiting in the wings, contemplating competing bids for Aer Lingus, must have been furious. None would ever have opened the bidding 38 per cent above the market level of 94c. Except Michael. He had ruined their plans.
All week O'Leary was said to be salivating as he witnessed the headless chickens of aviation and politics responding to his bold bid. He probably took the greatest pleasure at the thought of the apoplexy in the stuffy UK Competition Authority offices.
Less than a week earlier, the straight-laced British investigators had launched a probe into Michael's 29.82 per cent shareholding in Aer Lingus. They felt that maybe it was too high.
Michael's response was classic. Instead of respectfully unloading a few per cent in deference to the probe, he bid for the other 70.18 per cent. He must have driven the commissioners up the wall.
That is one of the reasons why some of us have learned to love Michael O'Leary. He has no time for authority or pomposity. He gives two fingers to IBEC, the Government, State monopolies, self-important commissioners and defies every business convention respected in official Ireland.
The only sensible souls in the whole Ryanair aviation game last week were the markets. They rumbled Ryanair. They looked at the O'Leary offer of €1.30 a share and had a bit of a laugh. Immediately after news of the bid broke the shares hit €1.17 but went into rapid retreat before closing at €1.07 on Friday. All the might of the Ryanair razzmatazz had not been able to lift the shares to within a country mile of the €1.30 bid price.
Dealers do not believe that Ryanair will ever get its hands on Aer Lingus. If they did, the share price would have shot up to €1.30 on the spot. If investors sensed a rival bidder in the wings it could have hit €1.40 -- or even higher -- in anticipation of a takeover battle for Aer Lingus.
Traders dismissed the Government's and Aer Lingus' empty protests that the Ryanair move undervalued the company as merely the usual bravado.
Indeed, the market verdict was simple. O'Leary was overvaluing the company. His bid would never see daylight. And he knew it.
The markets saw another scenario. O'Leary was not a buyer. He was a seller. He was locked into his Aer Lingus holding. The Ryanair 29.82 per cent stake was in play. The maverick businessman had simply made a bid to flush out other buyers. He would sell his holding to them.
Even more shrewdly, O'Leary has probably anticipated that there is no earthly chance of the European Commission changing its mind about Ryanair taking over Aer Lingus. It will once again sink the bid.
Back in 2007 the European Commission gave Ryanair the thumbs down to an Aer Lingus takeover on competition grounds. Today the volume of traffic operated by the two airlines amounts to 80 per cent in Dublin, 84 per cent in Cork and 64 per cent in Shannon. The prospects are of even less competition than in 2007. So how could the commission change its mind? Very difficult to see. The maestro is well aware of this. So is the market.
Ryanair has pleaded that all has changed, that big mergers of European aviation giants -- such as BA and Iberia -- have radically changed the industry, that an Aer Lingus/ Ryanair merger is in keeping with the trend.
Ryanair has promised to make concessions to meet the demands of fair competition, including surrendering certain routes to competitors. With his tongue firmly buried in his cheek, O'Leary has even pledged to run Ryanair and Aer Lingus as two competing airlines in the same group. They will use Aer Lingus to take on rival European airlines at airports Ryanair never uses. O'Leary is signalling reduction costs. He will increase Aer Lingus passenger numbers from 9.5m to 14m in five years.
Unfortunately, Michael's little fantasy should be shot at birth. Especially as it is most unlikely that he himself believes it will ever happen.
Michael O'Leary is the Irish wonderboy of his generation. He is the challenger without parallel. He is the man who broke the Aer Lingus/BA cartel on flights into Dublin. He championed the consumer with low fares and no frills. He was an iconoclast who rubbished the establishment, destroying monopolies as he expanded his fleet into one of the biggest in Europe. Ireland is proud of him, the bad boy of the aviation world.
Michael the giant killer is suddenly poised to become Michael the monopolist. If he is allowed to take over Aer Lingus he will grab a monopoly on key routes.
In 2007 the EU Commission blocked O'Leary's bid on the grounds that the two airlines competed directly on 35 routes and if the merger was approved there would be a monopoly on 22 of these routes, with the new company holding 60 per cent market share in the remaining routes. The old challenger would become the new dinosaur. The consumer would suddenly become vulnerable to Ryanair, the new monopolist. There would be no competitor forcing O'Leary to keep fares lower.
Today Ryanair is no longer the brave little airline. Aer Lingus is no longer the State- owned monopolist. Ryanair is 10 times the size of Aer Lingus.
O'Leary is a realist: the chances of him being allowed to take over Aer Lingus are negligible.
Michael O'Leary is a seller. And he is thoroughly enjoying himself.