Aer Lingus staff may raise stake: media

The body that holds 15 percent of Aer Lingus on behalf of the airline’s employees is reportedly looking at increasing its stake in order to block Ryanair’s 1.48 billion euro takeover bid.

The Employee Share Ownership Trust (ESOT) has looked at various ways of financing the purchase of additional shares, including using its existing stake as security for a loan, reported the Irish Times, quoting a source advising opponents to the bid. A number of other investors had also contacted Aer Lingus advisers to signal their intention to buy shares, added the publication.

Among the other developments related to the acquisition, it is being said that Ryanair may have to up its offer to buy a controlling stake in Aer Lingus to more than €3 a share. The budget carrier’s €2.80 per share bid, which values Aer Lingus at €1.48 billion, is a 27 percent  premium to the carrier’s initial public offering price of €2.20. However, given the opposition of the Government and unions to the takeover, some analysts believe Ryanair will have to up the price, according to irishexaminer.com.

According to media, Aer Lingus management and the Government were working on the defence, with the Government suggesting regulatory barriers make the takeover unworkable. Transport Minister Martin Cullen said Aer Lingus’s routes to the United States would be in jeopardy as a majority of the company’s shares must remain in Irish hands.

Ryanair chief executive Michael O’Leary told the Sunday Business Post: “Under every possible competition concept, Ryanair is an Irish airline. We are managed in Ireland, headquartered in Ireland, registered in Ireland. Under the regulatory authorities, we are an Irish airline, we are supervised by the Irish Aviation Authority and out operating licence is Irish.”

According to The Sunday Times, O’Leary believes staff at Aer Lingus could yet support his surprise £1 billion bid for the Irish national carrier despite the trenchant opposition of trade unions and the Dublin government. O’Leary told the publication that the cash offered — €2.8 a share — was a powerful incentive to airline workers, and that a way could be found around potential tax penalties. Individual Aer Lingus staff own thousands of shares through an employee share ownership plan (Esop), that amounts to a 12 percent stake.