Government formally accepts IAG offer for Aer Lingus share

The Government has formally accepted the IAG offer for its share in Aer Lingus after the airline’s shareholders backed guarantees around continued connectivity with Heathrow.

The Government had a mandate from the Dáil to sell its share in Aer Lingus, but that mandate could only be acted upon once the airline shareholders gave approval to connectivity terms hammered out with IAG.

The connectivity commitments were essentially twofold — Aer Lingus would always own the Heathrow slots and it would not be able to change the usage of the slots for at least seven years.

Yesterday morning at an airline EGM, four resolutions were voted on by shareholders, all aimed at putting those connectivity guarantees in place. All four were passed by a significant majority.

One of those resolutions allowed for the conversion of an ordinary share into a “B” share for the Government. That “B” share effectively means that if and when IAG finally takes ownership of Aer Lingus, the Government will have the right to veto the disposal of the Aer Lingus Heathrow slots and can enforce the seven-year commitment in terms of the allocation of the slots.

On June 19, when IAG issued its official offer document to every shareholder, it set 5pm yesterday as a deadline for the return of the form of acceptance which it had attached to the offer document.

It also put in a condition that it was seeking no less than 90% of shares — once 90% is owned, a company has the right to buy out the remaining 10%.

With many shareholders awaiting the outcome of the EGM, it was believed that the deadline would be extended by a few weeks.

Transport Minister Paschal Donohoe last night welcomed the EGM’s acceptance of the connectivity guarantees and said he had written to Finance Minister Michael Noonan, the official holder of the State’s 25.1% shareholding, indicating his support for acceptance of the IAG offer. He said he and Mr Noonan had agreed the latter would lodge the necessary documentation yesterday afternoon to formally accept the offer.

“The Government believes that the IAG offer provides the best means of securing Aer Lingus’s future and enabling it to develop and grow in the best interests of the company itself, its employees, the travelling public and the economy overall,” said Mr Donohoe.

“IAG has set out ambitious growth plans for the company under its ownership and I am excited at the prospects that this deal offers for Aer Lingus. I look forward to completion of the deal and to supporting Aer Lingus in its future development, which I am confident will see it continue to proudly and effectively serve Ireland, our people, and our economy.”