8-Sep-2011 11:11 AM

Ireland considers offloading Aer Lingus stake, Ryanair unlikely to make bid

Ireland’s Minister for Transport Leo Varadkar has confirmed the Government is considering selling its 25% stake in Aer Lingus, worth some EUR89 million at current prices. Media sources said Mr Varadkar noted the move is “certainly under consideration” as part of the Government's attempts to raise EUR2 billion through asset sales as it seeks to cut national debt. "That stake in the past was held for strategic reasons," Mr Varadkar said, adding, "I don't think that really stands anymore." The Government said it had considered Aer Lingus' slots are due to an increase in direct services to and from Dublin. Mr Varadkar said the government would only sell at the "right price to the right buyer". Ryanair, the largest shareholder with a 30% stake, has made several hostile bids for Aer Lingus in the past, but has been repeatedly knocked back on competition grounds. Britain's Office of Fair Trading is currently investigating whether Ryanair's ownership in Aer Lingus hampers competition in the sector. Mr Varadkar insisted, however, that no formal decision on the sale had been made by the cabinet.

Ryanair said if the government plans to dispose of its 25% stake, considering any offer from the LCC unwelcome, then "Ryanair is happy to confirm that it will not bid for the government's stake". The LCC noted that doing so may result in the government realising a lower price for its shares. Ryanair said it "would welcome another financially strong airline/investor acquiring the 25% stake", who "could then work with Ryanair and other like-minded shareholders to restore shareholder value, which has been destroyed over the past five years by the board and management of Aer Lingus". Ryanair will not rule out entering into discussions with the new shareholder about the "subsequent disposal of Ryanair’s near 30% stake subject to an acceptable agreement on price and maximising shareholder value". [more - original PR]

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