Ryanair Share Price: Hostile Bid Halted Aer Lingus Merger Talks

on Aug 30, 2013
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iNVEZZ.com Friday, August 30: New revelations shed more light on this week’s ruling by the UK Competition Commission that Ryanair should cut its 29.8 percent stake in Irish carrier Aer Lingus to below five percent, The Telegraph has reported. According to the newspaper article, Aer Lingus was in merger talks with another airline last year, before a hostile bid from Ryanair halted the discussions.

Ryanair share price declined 0.7 percent to €6.54 as of 8:55 BST in London. The Aer Lingus share price gained 3.03 percent to €1.70.

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**Affecting policy**
On Wednesday, the UK Competition Commission ordered Ryanair Holdings Plc (LON:RYA) to trim its shareholding in fellow Irish airline Aer Lingus Group Plc (LON:AERL) to five percent, with one of the arguments being that the stake of 29.8 percent affects Aer Lingus’s policy and strategy. Ryanair has repeatedly argued that its stake in Aer Lingus didn’t prevent Etihad Airways from building up a three percent stake in its smaller Irish rival last year. But now documents contained within the appendices to the

Competition Commission’s ruling explain the commission’s view, The Telegraph wrote.
The documents reveal that Aer Lingus held confidential discussions “in the first part of 2012” with another airline over a “possible combination”. The discussions progressed to the stage of a “confidential exchange of financial information, and contacts had taken place between senior management and respective financial advisers”.

!m[Revelations Shed New Light on UK Anti-trust Regulator’s Decision to Ask Ryanair to Cut Stake in Rival Airline](/uploads/story/5207/thumbs/pic1_inline.jpg)
But the discussions fell apart after Ryanair’s hostile bid of June 19, 2012, which saw Europe’s biggest low-cost airline offer €1.30 per Aer Lingus share. The reason was “primarily” the other airline’s unwillingness to be “perceived as a key player in the acquisition process”.

The Telegraph quoted Douglas McNeill, investment director at Charles Stanley Direct, as saying that the documents shed new light on the regulator’s ruling:
“It looks as though hunting for a partner has become a central part of Aer Lingus’s strategy – and that’s what has persuaded the Competition Commission that Ryanair’s stake is a problem.”
**As of 9:41 BST buy Ryanair shares at €6.50**
**As of 9:41 BST sell Ryanair shares at €6.49**
**As of 9:41 BST buy Aer Lingus shares at €1.68**
**As of 9:41 BST sell Aer Lingus shares at €1.66**

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**Start Investing The Social Way! >>**
FTSE 100 Watch: Footsie Lifted by Surging Vodafone Shares FTSE 100 Watch: Footsie Down as Geopolitical Risks Grow

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