Ryanair has revived its bid for the Irish government-backed carrier Aer Lingus, which is part owned by Etihad Airways. Aer Lingus stock surged as much as 25 per cent in trading in Dublin yesterday after Ryanair said it would make an all-cash offer of €1.30 per share, valuing the company at about €694 million (Dh3.23 billion).
Ryanair already holds a 29.8 per cent stake in Aer Lingus after previously being blocked from taking full control of the airline by antitrust rules.
The Irish government retains a 25 per cent stake in the carrier, which it intends to sell as the country seeks to raise revenue from asset disposals as part of an austerity drive. Etihad bought a 2.99 per cent stake in Aer Lingus last month to expand its destinations network.
In its cash offer document published on Tuesday, Ryanair presented alternative scenarios to investors, outlining its case for either taking full control of the company by itself or backing a similar move by another carrier such as Etihad.
"Ryanair believes that its new offer for Aer Lingus now provides Etihad or any other party with the opportunity to bid for the government's 25 per cent stake, should they wish to do so," said Michael O'Leary, the chief executive of Ryanair.
Mr O'Leary stands to gain either way. The bid has already sent the value of Ryanair's stock in Aer Lingus rocketing and increased pressure on any rival bidder to trump or at least match its €1.30-per-share bid.
Etihad has been building stakes in airlines as it expands globally. This month it expanded its holding in Virgin Australia to 4.99 per cent, with plans to raise the stake to as much as 10 per cent. In December, the airline also increased its stake in Air Berlin to nearly 30 per cent. It has also acquired a 40 per cent share in Air Seychelles.
twitter: Follow and share our breaking business news. Follow us
iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.
