Wily Willie holds all the aces now
'The Yates anthology'
The Government's rebuff to IAG this week reflects an unreal air about the future ownership of Aer Lingus. This is a corporate rather than political story. It reminds me of Texas Hold'em poker. Only two players hold big piles of chips - Willie Walsh and Michael O'Leary. On the 'flop', Walsh laid down €1.4bn. In his previous two hands, O'Leary tried to scoop the pot but was rebuffed by the Government, the take-over panel and EU Commission, who have now run out of options.
Transport Minister Paschal Donohoe has made a 'check' call to see Willie's hand. Poor Paschal is the patsy in the 'big blind' position. Because, on the 'turn', all IAG has to do is to drop any preconditions of Government acquiescence to its sale of its 25pc stake. This means IAG would readily acquire not only Ryanair's 29pc, but at least another 35pc from institutional and retail shareholders - giving it effective operational control.
A year down the road, Walsh can play the 'river card': a rights issue, involving a cash call of €1.2bn to re-fleet both long-haul and short-haul aircraft. Even if the Government wants to throw in more chips, EU rules preclude State aid. This effectively dilutes the Government shareholding to insignificant captive levels. Game over.