Ryanair takeover bid - Monopoly scenario poses risks

LOVE him or hate him, Ryanair’s Michael O’Leary never disappoints in his flair for the unexpected as shown by his breathtaking takeover bid for Aer Lingus which came like a bolt from the blue yesterday.

With shares soaring in the wake of his audacious bid for a company he once described as a ‘small regional airline’, investment experts see the takeover as a ‘done deal’ as Ryanair’s stake jumped from 16% to 20%.

The all-cash offer of €2.80 per share for the rest of the company is predicated on O’Leary gaining at least a majority of the shares in Aer Lingus. Meanwhile, shareholders who risked putting up the minimum investment of €10,000 will make a killing on the airline’s shares in the space of a week.

Given his implacable opposition to trade unions, they could indeed forgiven for taking a jaundiced view of his promise that work practices would not be changed.

The risks inherent in a monopoly scenario are obvious and it is crucial for the European Commission to oversee the takeover bid for Aer Lingus by its no-frills, low-cost competitor.