International Airlines Group (IAG), the owner of Iberia and British Airways, has made a third offer for Ireland's flag carrier Aer Lingus, after being rebuffed twice since December. It's bidding €2.55 a share in cash, or €1.35bn up from an original offer of €2.30 a share.
Aer Lingus has indicated that it is inclined to accept, but two major stakeholders have yet to assent: Ryanair and the Irish government, which respectively hold 30% and 25% of the shares.
What the commentators said
Since it started amassing its stake eight years ago, it has made three failed bids for its Irish rival and become embroiled in endless legal fights. If it doesn't sell to IAG now, regulators will probably force it to cut its stake to 5% in a fire sale there are precious few potential bidders around at present. Besides, at this offer price, Ryanair would break even on its Aer Lingus purchase.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
But what about the Irish government? A year before an election, the opposition has insisted that the deal is against the national interest, said James Moore in The Independent. Cue widespread eye-rolling in Britain: "airlines have used the attachment of governments to their businesses to pour billions of pounds, dollars, francs down the toilet". With "airlines evolving into giants" and fierce competition from the Gulf, it's not clear that Aer Lingus has a future on its own.
The upshot, reckoned The Guardian's Nils Pratley, is that the government will insist that the Heathrow-to-Ireland slots be preserved. IAG CEO Willie Walsh will want to do whatever he likes with the slots. "He won't get that, but there ought to be a sensible deal to be done."
Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.
After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.
His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.
Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.
Who is the richest person in the world?
The top five richest people in the world have a combined net worth of $825 billion. Who takes the crown for the richest person in the world?
By Vaishali Varu Published
Top 10 stocks with highest growth over past decade - from Nvidia, Microsoft to Netflix, which companies made you the most money?
We reveal the 10 global companies with the biggest returns since 2013. One firm has posted an astonishing 9,870% return, meaning a £1,000 investment would now be worth almost £82,000.
By Ruth Emery Published