Aer Lingus and IAG

The Irish government has formally accepted the IAG bid for its share of Aer Lingus with various built in guaranties.  However a take-over is still subject to EU competition scrutiny, considered a formality by most experts in the field, and the acquisition of the largest share element, the 29% held by Ryanair.

At this point of time Ryanair Plc has still not made an announcement regarding its position.  While Chief Executive Michael O’Leary has always been keen to introduce a long haul low-fare airline, essentially operating from North America to Europe, and has clearly seen Aer Lingus as that vehicle, the members of the Board might prefer to take the substantial profits on their holdings.

There is little doubt that the strategy of Mr O’Leary, with multiple appeals against decisions by various bodies, has worked in upping the price IAG required to offer, adding value to the Ryanair holding. 

Willie Walsh, Chief Executive of IAG, said last week that the company would make a formal offer within the next 28 days for Ryanair’s shareholding and he did not expect the low-cost airline to stand in the way of a deal. 

Will O’Leary call it a day at this point in time, or hold out for even more?  Is it his decision?   www.aerlingus.com

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