Ryanair will re-bid for Aer Lingus despite EC decision

Budget airline Ryanair has announced plans to re-bid for Irish rival Aer Lingus following the lapse of its current takeover bid, which abruptly came to an end when the European Commission (EC) referred it to Phase II.

The referral meant that in accordance with the takeover rules, the hostile bid ended with immediate effect.

Aer Lingus said: "Ryanair's first attempt to take over Aer Lingus was prohibited in 2007 on competition grounds. Aer Lingus is a much stronger airline today than it was at the time of the previous Ryanair offers and is Ryanair's only significant competitor on the vast majority of Irish air routes. The number of routes into and out of Ireland on which Aer Lingus and Ryanair compete has sharply increased since 2007. The reasons for prohibition are therefore even stronger than before.

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"In addition to the European Commission's in-depth investigation, the UK Competition Commission also continues to investigate the harmful effects of Ryanair's minority shareholding in Aer Lingus, which is contrary to the interests of consumers and the majority of our shareholders."

In a statement Ryanair told investors that any further offer will require the consent of the takeover panel to reverse the rules on making another bid within 12 months from August 29th, the day the offer lapsed.

The offer, which was Ryanair's third tilt at Aer Lingus in six years, "fundamentally undervalues" the company, Aer Lingus told its investors last week.

Ryanair, which is Aer Lingus's largest shareholder, launched the bid which valued the company at €694m back in June.

Ryanair's share price fell 1.64% to €4.13 by 14:13.

NR