Aer Lingus rejects Ryanair's new bid

By Andras Gergely

DUBLIN (Reuters) - Ryanair (RYA.I) revived its courtship of Irish rival Aer Lingus (AERL.I) on Monday, bidding 750 million euros (645 million pounds), just half of what it offered two years ago in an approach thwarted by European regulators.

The European Commission rejected Ryanair's 2006 offer on the grounds it would create a near monopoly in European flights out of Dublin.

Aer Lingus strongly opposed the last approach from its neighbour at Dublin Airport and its board on Monday rejected the fresh offer, saying it "significantly" undervalued the airline.

"Aer Lingus shareholders are strongly advised to take no action in relation to the offer," the company said.

Ryanair (RYA.L), which has already bought 29.82 percent of Aer Lingus (AERL.L) shares at an average 2.49 euros, said the all-cash offer at 1.40 euros represented a 28 percent premium over the average closing price for Aer Lingus shares in the 30 days to November 28, 2008.

Ryanair Chief Executive Michael O'Leary said it was "no surprise" Aer Lingus's board turned down the offer.

"The problem for the board is they don't have any other plan for Aer Lingus," O'Leary told public broadcaster RTE.

Aer Lingus said it remained "a strong business with significant cash reserves and a robust long term future."