DUBLIN (Reuters) – Aer Lingus is considering an improved 1.36 billion euro ($1.52 billion) takeover proposal from International Consolidated Airlines Group (IAG), the third attempt by the owner of British Airways to buy its Irish rival.
Aer Lingus said on Monday the new proposal was worth 2.55 euros per share, up from a previous 2.40 euros.
The proposal includes a cash offer of 2.50 per euros share and a cash dividend of 0.05 euros per share.
It is also conditional on the recommendation of Aer Lingus’s the board and irrevocable commitments from the Irish carrier’s two largest shareholders – budget airline Ryanair and the Irish government.
IAG, which also owns Spanish carrier Iberia, has had two takeover proposals rejected by Aer Lingus.
Buying the Irish airline would give IAG more take-off and landing slots at London Heathrow airport, British Airways’ home base and a major European hub for international flights.
But a deal would need the backing of Ryanair, which holds a 29.9 per cent stake in Aer Lingus after its own failed takeover attempts, and the Irish government, which owns 25 per cent.
Ryanair, currently appealing an order by Britain’s competition watchdog to cut its stake in Aer Lingus to 5 per cent having had three bids for its rival rebuffed in recent years, has said it has no particular concerns about an IAG takeover.
Ireland’s transport minister reiterated on Sunday the government would take huge care in evaluating any offer for the 79-year-old former flag carrier, and examine how a merger would affect Aer Lingus workers, its brand and both connectivity and competition for air routes out of Ireland.
Minister Paschal Donohoe said the state body responsible for advising the government on the sale of state assets would prepare a report on the value of its stake and the wider implications if a bid was recommended by Aer Lingus’ board.
Dublin included the sale of its stake in a privatisation plan agreed as part of a 2010 EU/IMF bailout before postponing the plan 18 months ago. Ireland’s two main opposition parties called on the government to rule out any sale, raising the political stake just over a year out from elections.
Aer Lingus’ main trade union IMPACT has written to the minister to outline “significant risks” to jobs and concerns over accessibility to Ireland for business and tourism.
Shares in Aer Lingus closed on Friday at 2.35 euros.