Wednesday 22 November 2017

Ryanair faces further wait for ruling on Aer Lingus shareholding

John Mulligan

John Mulligan

RYANAIR will now have to wait until August to find out whether it will be forced to sell all or part of its shares in Aer Lingus.

The UK Competition Commission, which in May determined that Ryanair exerts undue influence over Aer Lingus through its 29.8pc stake in the smaller carrier, had originally intended to issue a final determination by July 11 on the nature and extent of remedies it will impose on Ryanair.

But the watchdog said yesterday that it has extended the deadline to September 5. That eight-week extension is the maximum allowed under its rules.

It's widely expected that the commission will instruct Ryanair to sell a significant chunk of its Aer Lingus holding.

The chairman of the commission group investigating the Ryanair stake, Simon Polito, said that its final report "cannot be prepared and published" within the previous timeframe.

"In taking this decision, the group had regard to the scope and complexity of this inquiry, the need to allow sufficient time to take full account of any comments received in response to its provisional findings and the need to consider the effectiveness and practicability of the range of possible remedies," he added.

DEADLINE

But despite the deadline being extended to September, the commission still hopes to deliver its final findings in August.

Aer Lingus said that it will continue to assist the commission in its investigation.

Ryanair has already indicated that it will appeal any attempt by the commission to force it to sell any of its shares in Aer Lingus.

"In Ryanair's view, a divestment remedy would be an entirely disproportionate response, resulting in considerable cost to Ryanair," its lawyers have told the commission.

"A forced divestment necessarily entails obvious and significant prejudice," Ryanair has told the commission. "Under a forced sale, it is highly unlikely that the seller will obtain full or fair value for the asset. By contrast, any prospective purchaser has every incentive to game the disposal process to acquire the asset at an undervalue."

Ryanair spent more than €400m building its stake in Aer Lingus, but the holding is now worth €242m.

"A forced sale would depress market values, which would also impact directly on other shareholders in Aer Lingus," claims Ryanair.

The Department of Transport in Dublin has asked the UK Competition Commission to order Ryanair to sell its entire stake in Aer Lingus.

Irish Independent

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