Ryanair offer boosts Aer Lingus shares
- 20 June 2012
- From the section Business
Aer Lingus shares have risen 18% following rival Ryanair's latest attempt to buy the Irish airline.
They closed up 17 cents at 1.10 euros, although that was still well down on their peak of 3.27 euros reached in 2007.
On Tuesday, Ryanair said it planned to make a cash offer for Aer Lingus, which would value it at 694m euros (£561m).
Aer Lingus urged shareholders to take no action following Ryanair's third offer for the firm.
It said in a short statement that it noted the announcement by Ryanair of its intention to make an offer for the company, and said it would make further comments in due course.
Ryanair's latest offer of 1.30 euros a share marks a premium of 38.3% above Tuesday's Aer Lingus closing price.
But the fact that its share price has not risen to that offer price reflected concern that Ryanair, already Aer Lingus' largest shareholder, would not be allowed to buy it.
"There are a lot of unknowns that haven't been ironed out," said Alan Duff from Dublin stockbrokers NCB.
"People are waiting for more clarification on the anti-trust side of the deal."
On Friday, Ryanair's existing 30% holding was referred to the UK's Competition Commission for an inquiry that could lead to it being forced to sell the stake.
When Ryanair tried to buy its Irish rival in 2006, its attempt was blocked by the European Commission.
The Irish government has agreed to sell a number of state assets as part of the terms of its international bailout and this could include its 25% stake in Aer Lingus.
Prime Minister Enda Kenny said the government had not yet considered Ryanair's offer and said it would not be forced into a "fire sale".
"The government would be concerned obviously in terms of competition, in terms of consumer facilities, in terms of price and access to the country," he told parliament.
Opposition leader Micheal Martin urged the government to fight the bid.
"The government, on all our behalves, should oppose this bid to protect competition and to protect consumers, and to ensure connectivity in this country," Mr Martin, the Fianna Fail leader, said.