17/12/2008

Revamped Ryanair Offer Shot-Down

Aer Lingus has rejected the Ryanair offer despite a revised bid from the budget airline yesterday.

The rejection comes in spite of two major changes to the initial hostile takeover offer, with the Aer Lingus Chairman Colm Barrington dismissing the offer as "nothing new".

Originally, Ireland's mergers watchdog, the Takeover Panel, blocked two guarantees made as part of the Ryanair offer, arguing they could breach takeover rules by favouring one shareholder, namely the Irish Government which owns 25% of Aer Lingus.

Ryanair then changed the two clauses, saying they would no longer sell Aer Lingus' Heathrow Airport landing slots, and removing a €100 million guarantee originally to be paid to the Government if Ryanair defaulted on its promises to cut fares.

The Board of Aer Lingus has opposed the approach, saying the offer was "a stream of spin and misrepresentation".

In a sign of Aer Lingus' growing strength amid recent troubles, the airline announced yesterday it was to remove all fuel surcharges from its long haul flights.

Dermot Mannion, Aer Lingus Chief Executive, said, "This is very good news for Aer Lingus customers.

"We have been consistent in our approach to the fuel surcharge. Now that oil prices have fallen and stabilised over the past number of months, we believe the right thing to do is to remove these surcharges altogether."

Aer Lingus did not impose a fuel surcharge on its short haul services.

(DW)

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