Ireland's Ryanair bids €694 mn for rival Aer Lingus

Europe's largest low-cost carrier, Ryanair Holdings Plc (Ryanair) has submitted an offer to acquire rival Aer Lingus Group Plc for approximately €694 million ($853 million) to create a larger Irish airline group capable of competing with other rival airline groups led by Air France, British Airways, Lufthansa and easyJet.

About a month ago, Coinside Ltd, the wholly-owned subsidiary of Ryanair said that it would make an offer for Aer Lingus at €1.30 per share, valuing the company at around €694 million.

The offer price represented a 38-per cent premium over the price of Aer Lingus stock the day prior to the announcement. It is also 25 per cent higher than the closing price €1.04 of Aer Lingus shares on 13 July, just two days before the actual submission of the offer, Ryanair said in a statement.

Ryanair, which had eyed Air Lingus since 2006, already owns around a 30-per cent stake in the company. The Irish government holds 25-per cent interest in Aer Lingus.

The offer price is in addition to the dividend of €0.03 per share declared by Aer Lingus in May, the company said.

In its cash offer to Aer Lingus shareholders, Ryanair has set a time limit of 13 September 2012. The company said that it may purchase Aer Lingus shares from the open market as well.