Aer Lingus attempts to stop Ryanair issuing takeover bid before 2014

Aer Lingus is seeking a High Court ruling aimed at preventing Ryanair issuing another takeover bid for it until February of next year.

Aer Lingus is challenging an Irish Takeover Panel (ITP) ruling which meant Ryanair had only to wait 12 months after its unsuccessful Aug 2012 bid before it could make another.

Aer Lingus says it is being hampered in its commercial activities due to restrictions by such takeover attempts.

Its action against the ITP began yesterday before the Commercial Court. The ITP is opposing the action.

It wants Mr Justice Seán Ryan to rule no such bid could be launched before Feb 2014, which would be 12 months after the EU Commission’s decision blocking the Ryanair bid was made.

The action arises from Ryanair’s third bid in Jul 2012. The €694m offer was blocked last February by the commission which said the proposed merger would create a dominant firm on 46 routes where both airlines are competing.

Aer Lingus argues the ITP’S decision to allow another bid from next month is wrong in law. The ITP acted irrationally in leaving it subject to repeated offer periods by Ryanair.

The bid was done through a subsidiary Coinside Ltd, which with Ryanair are notice parties in the case.

Opening Aer Lingus’s case, Paul Sreenan said the ITP fundamentally erred in its application of general principles set down by the commission in relation to takeovers. He said Irish law governing takeovers must be interpreted in accordance with those principles.

“[Aer Lingus] must not be hindered in its general business operations for an unreasonable period by virtue of being subject to repeated takeover bids,” counsel said. It should not be subject to “repeated sieges” such that it affects how it carries on its normal operations.

The hearing continues.