Little interest in Ryanair takeover bid

AER LINGUS shareholders have shown little interest in Ryanair’s takeover approach, a move that will cost both airlines millions of euro.

Ryanair said the bid will cost it €3 million while Aer Lingus said it will also incur costs, although substantially below the €24m it spent during the last approach in 2006.

Aer Lingus said it regrets the “unnecessary waste of shareholder’s cash, especially as the Ryanair offer is not capable of completion.”

Ryanair yesterday extended the offer period to shareholders to February 13 in the €750m bid.

It has also formally requested an extraordinary general meeting of Aer Lingus shareholders to discuss the issue of agreements with Aer Lingus chief executive Dermot Mannion and chief financial officer Sean Coyle in the event of a takeover of the airline.

In its defence document, Aer Lingus said each executive director could terminate employment with 30 days notice at any time within six months after a change in control of the company. The director concerned would then be entitled to a settlement payment of two times the total of his salary, bonus and pension contribution in the previous year.

Ryanair, which owns 29.82% of Aer Lingus, said it had received acceptances totalling 29.83% of the shares, including its own stake.

Ryanair met with representatives of Tailwind Nominees on Monday. Tailwind holds about 2% of Aer Lingus on behalf of its pilots.

The “pathetic” acceptance level from shareholders endorses the “unanimous view of the Aer Lingus board that the offer significantly undervalues” Aer Lingus, the company said yesterday.

Aer Lingus also said its guidance for 2008 is unchanged, adding it has hedged 72% of its 2009 fuel requirement at a price of $911 per tonne. It has hedged 22% of its 2010 fuel needs at $876 per tonne.

Ryanair has offered €1.40 a share for the former state airline, just half the price of a previous offer in 2006 which was blocked by the European Commission on competition grounds.

The board of Aer Lingus has vowed to fight the new approach with the airline’s workers, which control a 14% stake.

Meanwhile, Ryanair chief executive Michael O’Leary yesterday denied he is in ill-health saying newspaper concerns about his health were unfounded.

“I’ve never been better,” he said. “I was getting fat, dumb and happy during the good times. Now there’s a leaner, more caring me for the recessionary times. We are all going to have to lose a bit of weight and work that bit harder.”

Ryanair also announced it carried almost 58 million passengers in the calendar year 2008, an increase of over 8 million passengers (18%) on its 2007 traffic.

Ryanair said passenger numbers on its flights rose 11% in December compared with a year earlier.

It carried 4.37 million passengers last month and its load factor was 79%, unchanged from a year earlier.

Ryanair shares fell 1% to €3.20 yesterday while Aer Lingus dropped 2.2% to €1.47.