Ryanair Holdings PLC has made €1.40 per share cash offer for the shares in Aer Lingus it does not already own, and plans to operate both airlines as separate companies.
The offer values Aer Lingus at approximately €748 million and represents a premium of approximately 28 percent over the average closing price of the share for the 30 days to November 28 2008.
Ryanair already owns approximately 29.82 percent of the current issued share capital of Aer Lingus.
Ryanair has requested an early meeting with the chairman and board representatives of Aer Lingus, as well as the Employee Share Ownership Trust trustees, to explain the benefits of the deal.
Ryanair plans to to double the size of the Aer Lingus short haul fleet to 66 aircraft from 33 over the next 5 years, thereby creating 1,000 new jobs in Aer Lingus during that period. Aer Lingus will remain a separate company and retain its special brand, and the Aer Lingus chairman will be invited to join the board of Ryanair.
Ryanair said in a statement it believes that Aer Lingus is an isolated, uncompetitive, loss making EU flag carrier which has been bypassed by accelerating EU wide airline consolidation. Ryanair believes that Aer Lingus needs to find a strong airline partner to secure its future.
Over the past two years, the trading environment for all European airlines has deteriorated dramatically as a result of high oil prices and the global recession. This has triggered a wave of EU airline closures and failures. In response, pan-European airline consolidation has accelerated as Europe sees the emergence of three large mega-carriers, Air France, British Airways and Lufthansa, and the rapid growth of Ryanair.
Ryanair's Michael O'Leary said: “This proposed merger of Ryanair and Aer Lingus will form one Irish airline group with the financial strength to compete with Europe's 3 major airline groups - Air France, British Airways and Lufthansa”
“Over the past 2 years, the management of Aer Lingus have failed its shareholders, customers and staff. Its shares have fallen from over €3, to less than €1 recently. Fares and fuel surcharge increases have cost consumers over €140m per annum and repeated restructurings have led to pay cuts and job losses with no substantial benefit as operating costs per passenger have risen by 18 percent in just 2 years. Aer Lingus is now suffering load factor declines, and has recently announced capacity reductions and forecast operating losses in 2008 and again in 2009,” he added.