Office of Fair Trading gets approval for Ryanair share investigation
BRITAIN'S Office of Fair Trading (OFT) has been given the green light to proceed with an investigation into Ryanair's near 29pc stake in Aer Lingus to determine if the airline has exerted "material influence" over the former State-owned carrier's strategy. It also plans to examine whether the shareholding has resulted in a substantial lessening of competition.
The probe had been delayed since last year after Ryanair tried to block it. The airline referred OFT's decision to proceed with the probe to the Competition Appeal Tribunal, maintaining that the OFT hadn't launched the investigation within a necessary four-month window.
Ryanair had originally argued that the OFT -- headed by Irishman John Fingleton -- had just a four-month window from when Ryanair made its initial move on Aer Lingus in 2006 to decide whether to launch an investigation.
However, the Competition Appeal Tribunal yesterday ruled the OFT was within the time limit to initiate its action. Once it completes its probe, the OFT will have to decide whether or not to refer the case to Britain's Competition Commission.
Ryanair lashed out at the decision yesterday. It said it would appeal the tribunal's ruling, which it claimed had thrown the "entire body of UK merger an acquisition rules into disarray". That appeal will further delay any OFT probe.
The OFT argued it had been unable to launch its probe until appeals by Ryanair and Aer Lingus to the General Court of the European Union Courts of Justice were completed last year.
Those appeals related to a 2007 decision by the European Commission to prohibit Ryanair's planned takeover of Aer Lingus and a ruling that Ryanair couldn't be forced to sell its stake in Aer Lingus. The tribunal agreed with the OFT.
Christoph Mueller, the chief executive of Aer Lingus, welcomed the decision.
"The European Commission blocked the Ryanair takeover of Aer Lingus more than four years ago, therefore, it is incomprehensible that they have been allowed to remain on our share register," he said. He claimed Ryanair's stake in Aer Lingus was "contrary to the interests of consumers".
Earlier this month, Mr Mueller described Ryanair as a professional shareholder. "We were able to establish a very professional environment in which we talk to each other.
"We are basically not fishing in their pond, and not the other way around," he added.