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Aer Lingus board recommends €1.4bn takeover

AER Lingus is expected to be sold for €1.4bn after the board of the company said it is willing to recommend a takeover bid by IAG, the owner of British Airways.

The sale will have to be agreed by shareholders and will also need regulatory approval.

The airline said today it was accepting an increased offer of €2.55 per share including a cash dividend following a number of attempts by IAG to buy Aer Lingus.

The offer is the third from International Consolidated Airlines Group in six weeks, and is worth €2.55 per share, up from €2.40, and includes a cash offer of €2.50 per share and a dividend of €0.05.

IAG is headed by former Aer Lingus boss Willie Walsh. He started off as an Aer Lingus pilot before eventually running the airline, and is also chairman of Ireland's debt agency.

The main shareholders in Aer Lingus include the Government, with a 25.1pc stake, and Ryanair, which owns 29.8pc. Both have the power to block any deal.


"Having considered this request, the board has indicated to IAG that the financial terms are at a level at which it would be willing to recommend, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties," Aer Lingus said in a statement.

"The board notes IAG's intentions regarding the future of the company, in particular that Aer Lingus would operate as a separate business with its own brand, management and operations, continuing to provide connectivity to Ireland, while benefiting from the scale of being part of the larger IAG group."

The offer values Ryanair's holding at €405m - just €2m less than Ryanair paid in total for its Aer Lingus stake.

Shares in Aer Lingus were 1.2 percent higher at €2.40 early this morning. IAG rose 2.4pc to 562p in early trade, the highest level since the group was formed four years ago.

Aer Lingus shares closed at €2.37 yesterday, an increase of almost 1pc in the day's trading.

Transport Minister Paschal Donohoe has said that issues like air connectivity and competition will be considered before the Government makes a decision on selling its Aer Lingus stake.

Connectivity is "absolutely vital to our economy and our society," Mr Donohoe said.

"Heathrow remains a very important hub for connectivity purposes, but as it becomes more congested other hub options are becoming available," he added.