Government: Aer Lingus position ‘has not changed’

Government sources have played down suggestions that the Coalition will reject a takeover bid by aviation giant IAG for Aer Lingus after shares in the airline fell amid reports.

Government: Aer Lingus position ‘has not changed’

The Irish Examiner can reveal that IAG chief executive Willie Walsh will attend talks between a Government review group and his officials about the proposed bid tomorrow in Dublin.

Senior sources last night denied a report the Government, which holds 25%, was preparing to reject IAG’s indicative offer. A spokesman for Paschal Donohoe, the transport minister, also said: “Our position has not changed.”

Earlier, Mr Donohoe again said any decision on the bid would be dependent on talks between an inter-department body and IAG. These continue tomorrow, but also will involve Mr Walsh.

A blanket government rejection of IAG’s bid would likely leave any takeover dead in the water, industry sources said.

Shares in Aer Lingus fell almost 10% yesterday after reports the Government would reject IAG’s advances.

Sources indicated that the move would come as a surprise at this stage with negotiations between parties still ongoing, and suggested that it would put an end to IAG’s interest in the carrier.

If the Government is preparing to issue a blanket rejection without any explanation of its position or invite further discussions on the matter, IAG would be forced to seriously consider its position and would likely withdraw its interest, sources said.

The proposed takeover by IAG has caused substantial discussion with the Government coming under increasing pressure to secure guarantees over the future of Aer Lingus’s valuable Heathrow slots and connectivity to the country’s regional airports.

IAG, which last week offered the Government limited guarantees, has previously said that its offer is conditional on the support of the Government and Ryanair which owns 29.8% of Aer Lingus’ shares.

Sources also indicated that the Government may need to formally address the issue in a bid to avert a further share price slide when the markets open this morning.

Aer Lingus declined to comment last night.

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