viewRyanair Holdings plc

Ryanair faces uphill battle to acquire rival suggests JP Morgan

Ryanair’s (LON:RYA) chances of getting EU approval to buy Aer Lingus ( LON:AERL) are not high suggests JP Morgan, but that may not be bad news for its shareholders.

The European authorities announced yesterday that they were to launch a Phase II inquiry into the bid, forcing Ryanair to lapse its offer.

However, the no-frills airline said it would re-bid if it gets the go-ahead from Europe.

The US broker doubts this will happen after comments from the European Commission that competition concerns had increased since it rejected Ryanair’s first attempt to buy its rival in 2007.

JPM also said that while buying Aer Lingus would be a low risk move given its strong balance sheet and good underlying margins, the deal may not benefit Ryanair shareholders.

The broker said it cannot see the strategic rationale in a low-cost carrier such as Ryanair buying a legacy carrier such as Aer Lingus unless it is a way for Ryanair to hedge its US$ costs with Aer Lingus' US$ revenues. 

At least part of Ryanair’s investment thesis is also predicated on returning excess cash to shareholders, something the broker believes may be potentially be less likely if it acquired Aer Lingus.

Shares in Ryanair today rose 0,03c to €4.16, while Aer Lingus dipped slightly to €1.07. 

Quick facts: Ryanair Holdings plc

Price: 9.58 EUR

Market: LSE
Market Cap: €10.46 billion

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...



Full interview: Dunnedin Ventures changes name of company to Kodiak Copper Corp

Dunnedin Ventures (CVE: DVI) CEO Claudia Tornquist joined Steve Darling from Proactive Vancouver to discuss the company changing their name to Kodiak Copper Corp with the ticker symbol KDK. Tornquist telling Proactive why the change and also if the COVID-19 pandemic has affected their...

12 hours, 48 minutes ago

2 min read