IAG share price: Aer Lingus snubs bid by British Airways owner

on Dec 19, 2014
Updated: Oct 21, 2019

iNVEZZ.com, Friday, December 19:Aer Lingus (LON:AERA) has rejected a takeover approach from International Consolidated Airlines Group (LON:IAG), the British Airways and Iberia owner has said. Despite the rejection, investors reacted positively to the FTSE 100 group’s takeover ambitions with IAG’s share price closing 4.49 percent higher at 463.50p.

IAG revealed in a short statement to the London Stock Exchange yesterday that it had submitted a proposal to make an offer for Aer Lingus. The offer, however, was rejected by the Irish airline’s board. The British Airways owner released the statement after a report in the Financial Times about the takeover bid sent shares in the Irish company soaring 20 percent.
Aer Lingus confirmed the approach in a separate statement, saying that it had received a preliminary offer on Sunday. The Irish company noted that the board had “reviewed the proposal and believes that it fundamentally undervalues Aer Lingus and its attractive prospects”.

While neither IAG nor Aer Lingus have commented on the price in their respective statements, one source with knowledge of the matter told the FT that the offer valued shares in the Irish carrier at €2.20 each, giving the company a valuation of €1.16 billion (£910 million). The Times yesterday quoted analysts as saying that Aer Lingus’ 23 slot pairs at Heathrow were central to IAG’s approach with the Irish carrier being the third-largest holder of slots at the airport, where such pairs are reckoned to be generally worth upwards of £30 million each.
A potential deal between the two companies will require backing by Ryanair Holding (LON:RYA) which holds just under 30 percent in Aer Lingus, as well as by the Irish government which has a 25 percent interest. Ryanair, however, has been ordered to sell its stake in Ireland’s national carrier by UK competition authorities, but is appealing that decision.
As of 07:48 GMT, Friday, 19 December, International Consolidated Airlines Grp share price is 463.50p.

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