Aer Lingus shareholers urged to reject takeover bid

Aer Lingus today urged shareholders to reject Ryanair’s takeover bid and ignore threats peddled by the budget airline.

In a letter, chairman Colm Barrington said Ryanair could not be allowed to take the former national carrier’s superior brand at a price which undervalues the airline.

Mr Barrington said Aer Lingus will make a profit this year despite the global airline industry losing $5bn (€3.57bn).

“Aer Lingus has proven that it can compete with major flag carriers on the one hand and low-cost operators on the other,” Mr Barrington wrote.

“This is not a model to be sacrificed for the benefit of Ryanair and its shareholders.”

Ryanair has offered to buy Aer Lingus for €1.40 per share, or €747.5m – around half the sum tabled in its first failed bid two years ago.

At a meeting with TDs and Senators last week, Ryanair boss Michael O’Leary warned that the former national carrier’s future was bleak unless the budget airline was allowed to step in and to prop it up.

Mr Barrington told shareholders that Ryanair was opportunistically trying to capitalise on market fears and uncertainties to gain access to Aer Lingus’s huge cash resources and valuable assets.

“Do not let this rip-off happen,” he wrote.

He claimed Aer Lingus did not need to be rescued by Ryanair and that the takeover would create a monopoly.

“Ignore Ryanair’s threats, contradictions and insinuations,” he wrote.

“The way to reject the offer is to take no action.”

Aer Lingus chief executive Dermot Mannion said the Ryanair offer did not come close to valuing the airline’s assets.

He said it did not consider the market value of the airline’s fleet of more than €600m euro or its other assets, including the Heathrow slots and brand.

“The message couldn’t be clearer. The board unanimously agrees that this Ryanair offer should be rejected,” Mr Mannion said.

“We fundamentally disagree with the proposition that they have put forward. In our view, two strong Irish airlines competing in Europe is the right way to go.”

He said there was profitability expected both this year and next and that Aer Lingus was not weak.

“We are one of the strongest airlines in the industry in Europe,” he said.