Ryanair extends offer period for Aer Lingus bid

Tue Jan 6, 2009 1:35pm GMT
 
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By Jonathan Saul and Andras Gergely

DUBLIN (Reuters) - Irish airline Ryanair on Tuesday extended the offer period to Aer Lingus shareholders after getting virtually no response to its 750 million euro (688,000 pound) takeover bid for its rival. The low-cost carrier had set a closing date of January 5 but put back the deadline to February 13.

Ryanair, which owns 29.82 percent of Aer Lingus, said by January 5 it had received acceptances totalling 29.83 percent of the shares in Aer Lingus, including its own stake.

Collins Stewart analyst Andrew Fitchie said it was not unusual to have such a low uptake initially, but he said Aer Lingus' share price indicated Ryanair would have to raise its offer to woo the main stakeholders.

"For this to go ahead they need to substantially increase the offer, sweeten it from the government and unions' perspective, if they stand any chance," Fitchie said.

"It's quite compelling for Ryanair so I'm sure they would go the extra mile," Fitchie added.

Ryanair has offered 1.40 euros a share for the former state airline, just half the price of a previous offer in 2006 which was blocked by the European Commission on competition grounds.

Shares in Aer Lingus traded 1.7 percent weaker by 1:27 p.m. at 1.48 euros. Ryanair was 0.4 percent weaker at 3.23 euros, while the wider Irish market gained 3.3 percent.

Ryanair Chief Executive Michael O'Leary, who has held talks with the Irish government and Aer Lingus employees -- the carrier's two other major shareholders -- said he remained confident the offer would succeed.  Continued...

 
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