Tuesday December 2, 04:00 PM
UPDATE 1-Ryanair seeks to meet Aer Lingus shareholders
By Jonathan Saul
DUBLIN, Dec 2 (Reuters) - Ryanair (Dublin: RY4.IR - news) said on Tuesday it was seeking to meet with Aer Lingus
(LSE: AERL.L - news) shareholders after the board of its Irish rival rejected a new 750 million euro ($945.6 million) bid by Europe's biggest budget airline.
Ryanair, which has already bought 29.82 percent of Aer Lingus shares at an average 2.49 euros, on Monday made its all-cash offer at 1.40 euros per share, representing a 28 percent premium over the average closing price for Aer Lingus shares in the 30 days to Nov. 28.
Aer Lingus turned down the previous approach from its neighbour at Dublin Airport, and its board on Monday rejected the fresh offer as 'significantly' undervaluing the airline and strongly advised shareholders to take no action.
A Ryanair spokeswoman said the carrier was seeking meetings with the Irish government and other Aer Lingus shareholders and one analyst said a deal might benefit the Irish airline industry in the long term.
A finance ministry spokesman said on Tuesday no meeting had been scheduled 'at this time' with minister Brian Lenihan.
'No request for a meeting to discuss the takeover bid has been received by the department of transport from Ryanair,' a transport ministry spokeswoman said separately.
'We would expect that when Ryanair make their formal bid, which they have not yet done, they will request a meeting with us.'
The government has a 25.1 percent stake in the carrier, which was privatised in 2006, while employees hold 14.2 percent. A further 30.8 percent stake is held by other investors including a 2.27 percent holding by billionaire Denis O'Brien.
Education and Science Minister Batt O'Keeffe told public broadcaster RTE TV late on Monday a merger of the two airlines at this point 'would not be in keeping with government policy'.
'Let's see the offer,' he said, adding that the government had to take on board the rejection by Aer Lingus's board.
In London, shares in Aer Lingus were trading 5.3 percent higher by 1514 GMT at 1.34 euros, while Ryanair's shares were 1.4 percent higher at 2.82 euros.
'There seems to be appetite for Aer Lingus shares and this bid could have legs,' a Dublin-based trader said.
Ryanair Chief Executive Michael O'Leary said on Monday it was 'no surprise' Aer Lingus's board turned down the offer adding that the offer document would be published shortly.
O'Leary said he believed Aer Lingus staff would be more receptive this time, given recent job losses at the airline. But unions said they had major concerns over jobs prospects and competition.
Ryanair's fresh bid was just half of what it offered in 2006. That approach was rejected by the European Commission on the grounds it would create a near monopoly in European flights out of Dublin.
Analysts believe a recent spate of airline mergers means the chances of success would be greater this time, even if a takeover would still prove highly contentious in Ireland.
Friends First Chief Economist Jim Power said an open mind was needed on the new offer.
'We must not allow ideological blind spots or past enmities to get in the way of a proposal that could be in the best long-term interests of the Irish airline industry and of the Irish economy,' Power wrote in the Irish Independent on Tuesday.
(editing by John Stonestreet and Hans Peters) ($1=.7931 Euro) Keywords: RYANAIR AERLINGUS/
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