Monday 26 February 2018

IAG has backing of 80pc of Aer Lingus shares for €1.4bn deal

Aer Lingus operations at Gatwick. The airline will have to surrender five slots at the London airport.
Aer Lingus operations at Gatwick. The airline will have to surrender five slots at the London airport.
John Mulligan

John Mulligan

IAG has secured the backing of more than 80pc of Aer Lingus shares for its planned €1.36bn takeover of the airline. It brings it close to the 90pc it needs to force remaining Aer Lingus shareholders to sell up.

IAG confirmed yesterday that by the close of business on Thursday it had valid acceptances in respect of 50.53pc of the shares. That includes the State's 25.1pc stake, after the Government formally accepted the IAG takeover this week.

However, the 50.53pc does not include any of the 29.8pc stake that's owned by Ryanair.

Ryanair has already indicated that it will be accepting the IAG offer, with chief executive Michael O'Leary describing it as "reasonable".

However, Ryanair still has to formally accept the offer, meaning its shares haven't yet been included in the IAG acceptance calculation.

Ryanair releases first-quarter results on Monday week and might wait until after that event to formally accept the bid.

Regardless of the timing, it means that IAG has all but secured slightly more than 80pc of Aer Lingus shares.

The UK's Competition and Markets Authority gave Ryanair permission this week to sell its Aer Lingus holding to IAG.

The European Commission and the US Department of Justice have also cleared the Aer Lingus takeover.

While IAG can delist Aer Lingus shares when it owns 75pc of the stock, it has said its offer for the Irish airline is conditional on it gaining valid acceptances in respect of at least 90pc of shares.

Once IAG has more than 90pc acceptances, it has a right to acquire all remaining shares in Aer Lingus - a process known as a "squeeze out".

It has extended its offer for Aer Lingus to July 30 at 1pm.

IAG releases its half-yearly financial results the following day. Aer Lingus releases its first-half financial results on July 29.

Etihad, which owns almost 5pc of Aer Lingus, has also indicated that it will sell to IAG.

Aer Lingus shareholders backed four resolutions on Thursday that confirm specific commitments on connectivity and give the Government a veto over any possible future sale of Aer Lingus slots at Heathrow.

IAG will surrender five take-off and landing slots at Gatwick as a concession to the European Commission to allow the takeover to go ahead.

However, the EC did not force IAG to relinquish any slots at Heathrow.

IAG, through Aer Lingus and British Airways, will now have a monopoly on routes from Ireland to Heathrow.

Aer Lingus chairman Colm Barrington said that he thought Heathrow has been made a "bit of an over issue over the years".

"London is a big city surrounded by several airports, so I think the EU took London as a whole, rather than any particular airport," he said.

IAG has noted updated banking agreements in relation to the Aer Lingus offer.

Bankia, BNP Paribas Fortis, CaixaBank and UniCredit have now joined the financing arrangements to provide a bridge facility of up to €1.4bn to facilitate the takeover.

In numbers


The percentage of Aer Lingus shares IAG has effectively secured


What Ryanair will get for its Aer Lingus stake


What the State will get

Irish Independent

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