Tuesday 12 December 2017

Market still expects Ryanair bid to fail

WITH the share price signalling that the market still thinks that its bid for Aer Lingus doesn't have a prayer, the latest rumour is that Ryanair is trying to offload its 29.8 per cent Aer Lingus shareholding to a Middle Eastern or Far Eastern sovereign wealth fund.

Meanwhile, Ryanair announced on Thursday that it was in negotiations with 10 airlines on possible route pairings. Ryanair is hoping to be able to use such route pairings as part of a package designed to overcome the hostility of the UK and European authorities to the deal on competition grounds (Where was the Irish Competition Authority?).

However, with the Aer Lingus share price of €1.09 still more than 16 per cent lower than the €1.30 that Ryanair has offered for its main Irish rival, the markets are making it crystal clear that they still expect the bid to fail.

Maybe this explains the latest crop of rumours of Ryanair selling its Aer Lingus stake. If it did sell out, as has been reputed, to either a Middle Eastern or Far Eastern sovereign wealth fund, it would drastically reduce the number of possible buyers for the State's 25 per cent Aer Lingus stake, as non-EU shareholders are not allowed to take majority shareholdings in European airlines.

Sunday Indo Business

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