Aer Lingus and IAG

The board of Aer Lingus has recommended to the Irish government a raised €1.36bn takeover offer from IAG.  The new offer from British Airways, its third in six weeks, is worth €2.55 per share, up from a previous €2.40, and includes a cash offer of €2.50 per share and a cash dividend of €0.05 per share. (See BTN 26 January)
 
Aer Lingus said that its recommendation is subject to being satisfied with how IAG proposes to address the interests of relevant parties including its main shareholder Ryanair with 29.82% and the Minister for Finance Ireland 25.11%.  The 45.07% balance is spread thinly with Etihad the largest small investor at 4.9%
 
Any sale would also have to be approved by the Irish parliament.  The two-party coalition government has a large majority but a vote could nevertheless put pressure on backbench MPs.
 
One “fly in the ointment” is the unfinished business of the Aer Lingus pension fund with its many disgruntled members.  They are likely to be high profile with their protests.  The airline’s main trade union IMPACT has said that a takeover could lead to the loss of up to 1,200 jobs, a quarter of the carrier's workforce, but this is pure speculation and trouble making. www.aerlingus.com  www.iairgroup.com

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