Sunday 25 February 2018

Ryanair gets final ultimatum to sell Aer Lingus stake

Michael O’Leary: Ryanair boss is likely to wait until next month to make a decision
Michael O’Leary: Ryanair boss is likely to wait until next month to make a decision
John Mulligan

John Mulligan

Ryanair has been given a final ultimatum by a UK competition watchdog to sell most of its near-30pc stake in Aer Lingus.

The airline, headed by Michael O'Leary, has only until the end of next Thursday to draw up a shortlist from which an independent trustee will be selected to oversee the share sale.

But Ryanair - already battling the long-standing decision by the UK's Competition and Markets Authority (CMA) to make it cut its Aer Lingus stake to no more than 5pc - has vowed to take further legal action to block the forced sale.

The tussle comes as British Airways owner IAG advances its planned €1.36bn takeover of Aer Lingus, with the Government already having agreed to sell its 25.1pc stake in the Irish carrier to the airline group headed by Willie Walsh.

Mr O'Leary said yesterday that Ryanair was unlikely to make a decision on whether to sell its Aer Lingus stake until after the European Union competition authority made a ruling on the IAG plan. That EC decision is due by July 1.

Ryanair can seek permission from the CMA to sell its Aer Lingus shares to IAG.

However, IAG could just wait for the forced divestment process to start in the hope of buying up most of the Ryanair-held shares.

IAG had previously indicated it wouldn't make a formal offer to buy Aer Lingus until Ryanair gave a binding commitment to sell its Aer Lingus shares to the British Airways owner.

The chairman of the CMA Ryanair/Aer Lingus inquiry group, Simon Polito, claimed that the fact IAG's bid was "dependent" on securing Ryanair's backing, meant that "Ryanair can decide whether a bid for its major competitor on UK/Irish routes succeeds or fails".

Mr O'Leary rubbished Mr Polito's "false" claims, insisting Ryanair had no means of preventing IAG from acquiring Aer Lingus. But IAG needs to be able to acquire 90pc of Aer Lingus shares in its takeover bid in order to force any remaining shareholders to sell up.

The CMA, headed by former Irish telecoms regulator Alex Chisholm, has to approve the list of potential trustees that might be drafted by Ryanair, with the airline allowed to choose who'll then oversee the sale process of its Aer Lingus shares. If Ryanair doesn't present the CMA with a list of possible trustees next week, the CMA will select one itself.

Irish Independent

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