Michael O’Leary says IAG/Aer Lingus takeover deal likely

Michael O’Leary says IAG takeover of Aer Lingus will get approval.

European and UK regulators are likely to favour the purchase of Aer Lingus by British Airways owner IAG if an offer is made, Ryanair chief executive Michael O’Leary said.

“I suspect the regulatory authorities will fall over themselves to encourage an IAG takeover,” the executive said in London yesterday. While the IAG bid “isn’t the last option for Aer Lingus,” it “clearly demonstrates that Aer Lingus has no viable independent future, the only question is, which partner?”

International Airlines Group is mulling a higher indicative offer for Aer Lingus after seeing two earlier proposals dismissed. The most recent, at €2.40 for each share, which valued the airline at €1.28bn, is 40c lower than the amount offered by Ryanair in 2006 in the first of three unsuccessful takeover attempts by the budget carrier.

“Our stake has been for sale for about an 18-month period,” Mr O’Leary said. “We’ve gone to most of the leading airlines in Europe, including IAG, all of whom turned us down,” he said, adding that he has not discussed the most recent proposal with either IAG or Aer Lingus.

Mr O’Leary declined to comment on what price he considers reasonable for Ryanair’s 30% shareholding. The Government, which controls 25%, would also need to sign off on a deal.

“The Government’s role in this is as a large shareholder, the same as Ryanair, their decision-making will be confined to ‘do you want the price IAG is offering?” the Ryanair boss said.

The Department of Transport said last week that the Government would be open to selling its shareholding, declining to comment further.

Buying Aer Lingus would help swell IAG’s bank of scarce take-off and landing positions at Heathrow, Europe’s busiest hub, where British Airways is the No. 1 carrier.

The deal would also mark the return of IAG chief executive Willie Walsh, who began his career as an Aer Lingus pilot, eventually rising to run the company before taking over at BA.

Bloomberg