Aer Lingus aims to ground Ryanair takeover attempts

The Commercial Court will deal next month with an action by Aer Lingus aimed at preventing Ryanair issuing another takeover bid for the national carrier in August.

Aer Lingus claims it has incurred €40 million costs in defending against Ryanair’s bids to date and faces incurring further costs as a result of the restriction imposed on its commercial activities due to such takeover attempts.

It is challenging a ruling by the Irish Takeover Panel to the effect Ryanair had to wait 12 months after its Aug 2012 takeover bid before it could make another bid.

Aer Lingus had sought a ruling that no such bid could be launched before Feb 2014, 12 months after the European Commission’s decision blocking the Ryanair bid was made.

It is alleged that the panel’s ruling has major commercial implications for Aer Lingus as, when the airline is in an offer period within the meaning of the takeover rulings, it is significantly restrained in its commercial operations.

Mr Justice Peter Kelly yesterday granted an application by Paul Sreenan, for Aer Lingus, to fast-track the case in the Commercial Court and fixed it for hearing on Jul 18.

David Barniville, for the panel, and Martin Hayden, for Ryanair, consented to the application.

The action arises from Ryanair’s €694m bid to win control of Aer Lingus. That offer, Ryanair’s third bid for its rival, was formally tabled in late Jul 2012 but was blocked in February by the European Commission, which said the proposed merger would harm consumers by creating a dominant company on 46 routes where both airlines are competing.

Aer Lingus argues the panel’s ruling is wrong in law and the panel acted irrationally in leaving it subject to repeated offer periods. Ryanair and a subsidiary, Coinside Ltd, through which the bid for Aer Lingus was made, are notice parties to the case.

Ryanair is Aer Lingus’s biggest shareholder with a 30% stake.

The Government, holder of a 25% stake, also opposed Ryanair’s bid.