Ireland to exercise great caution in evaluating IAG offer for Aer Lingus

on Jan 21, 2015
Updated: Oct 21, 2019

The Irish government will evaluate a potential new bid for Aer Lingus (LON:AERL) by International Consolidated Airlines Group (LON:IAG) with great caution, Reuters has reported, quoting Ireland’s transport minister. The British Airways and Iberia owner is expected to raise its takeover offer after Aer Lingus rebuffed two proposals last month.

As of 14:11 GMT, IAG’s share price had lost 0.10 percent to stand at 508.50p. The shares are underperforming the broader market with the benchmark FTSE 100 index having added 0.67 percent to 6,664.58p so far today.
Reuters yesterday quoted Irish transport minister Paschal Donohoe as telling MPs that the government would ‘exercise great caution’ in evaluating whether a bid for Aer Lingus by the British Airways owner is in the country’s best interest.

“Should such an offer be made, we will take great care and exercise great caution in examining the pros and cons to Ireland of any such offer,” Donohoe told the Dáil last night. The Irish government is Aer Lingus’ second-biggest shareholder, after Ryanair (LON:RYA), with a 25-percent stake.
Aer Lingus has already snubbed two bids from IAG, with the second one valuing the Irish carrier at €2.40 per share. The Irish Independent this week quoted Davy stockbrokers aviation analyst Stephen Furlong as expecting a potential third offer to be “marginally north of €2.50”.

“The longer we wait, the more likely it is that there will be a recommended offer,” Furlong added.
The Financial Times reports that as of January 16, the consensus forecast amongst 35 polled investment analysts covering the British Airways owner has it that the company will outperform the market. Analyst Ratings Network notes that the blue-chip company currently has a consensus ‘buy’ rating and an average price target of 510.23p.
As of 15:20 GMT, Wednesday, 21 January, International Consolidated Airlines Grp share price is 510.00p.

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