Decision on €1.4bn takeover of Aer Lingus set to drag into May
A decision by the Government on the future of Aer Lingus now looks set to be delayed until May, with no signs that the Cabinet is due to consider the issue at its meeting next Tuesday.
It had been anticipated that the Government might have made a decision by next week on the potential sale of the State's 25.1pc stake in Aer Lingus to IAG.
Aer Lingus holds its annual general meeting next Friday, while IAG also releases first quarter results next Thursday.
It appears that neither company will now be in a position to provide any meaningful update to shareholders at the events, despite the possible €1.4bn takeover.
However, it is not clear at this stage whether a report being prepared for Transport Minister Paschal Donohoe by a steering group has even been completed.
Mr Donohoe will use that report to brief his Cabinet colleagues in advance of the Government making a decision on whether or not to sell the State's Aer Lingus stake.
However, Aer Lingus unions also expect to be briefed by Department of Transport in advance of any decision being made.
The looming bus strike and other political issues may have downgraded Aer Lingus as a priority issue on the Government's agenda for the next couple of weeks.
Mr Donohoe has insisted on numerous occasions that he and the Government won't be rushed into making a decision on Aer Lingus, but at the same time has said he does not want the issue to drag on. Should the Government decide to sell, a Dail vote is needed before a disposal of the Aer Lingus stake can be formally approved.
But if the Government rejects the IAG takeover approach, the British Airways and Iberia owner, which is headed by Willie Walsh, will have to decide if it will pursue majority control of Aer Lingus. Such an option could see it attempt to buy all but the Government's stake in the airline.
One senior UK equity analyst, who did not wish to be named, told the Irish Independent that such an approach would be risky for IAG.
He said that a takeover suitor would normally only opt to acquire a majority of a takeover target in order to prevent a potential rival bidder from muscling in, and in the hope of persuading the minority shareholder to sell out later.
"Given the absence of other bidders, and the risks from a blocking minority, the risk might not be worth it," the analyst said.
IAG has also said its takeover offer will be predicated on securing an agreement from Ryanair to sell its near 30pc stake in Aer Lingus to the company.
The Department of Transport chairs the steering group preparing the report on the IAG takeover approach.
The steering group includes executives from Credit Suisse, law firm McCann Fitzgerald, and IBI Corporate Finance.