Aer Lingus has rejected Ryanair’s €694 million bid for it, saying it “fundamentally undervalues” the airline and predicting the proposed deal will be thrown out by the European Commission again.
Ryanair yesterday revealed its third attempt to buy its rival and Aer Lingus’s rebuttal is no surprise. Aer Lingus argues that since the last attempt, in 2006, which was blocked on competition grounds, the case against a merger has become stronger. Aer Lingus claims that the number of routes Ryanair would monopolise if the bid is permitted “has sharply increased”.
Aer Lingus says it has received advice that the European Commision “is likely once more to prohibit the Ryanair offer and that this is therefore not a credible offer which is capable of completion”. It also points out that it has become a profitable company since Ryanair’s last attempt.
Aer Lingus also claims that the UK Competition Commission “is likely” to require Ryanair to sell down its current 29.82% stake in Aer Lingus because of “anti-competitive effects”.
Aer Lingus will write to its shareholders in the next fortnight outlining its opposition to Ryanair.