27th May 2015 05:45
LONDON (Alliance News) - Irish flag carrier Aer Lingus Group PLC late on Tuesday said it has moved a step closer to being taken over by British Airways owner International Consolidated Airlines Group in a EUR1.4 billion deal, after the Irish government gave its backing to the deal.
Under the terms of the deal, IAG will pay EUR2.55 per share in cash for Aer Lingus, split between a EUR2.50 cash payment and a EUR0.05 cash dividend per Aer Lingus share. The offer is at a premium of 40% to Aer Lingus' closing price of EUR1.82 per share on December 17, the last day of dealing prior to the initial offer having been made. It is also at a 77% premium to the volume-weighted average price of Aer Lingus shares in the six months prior to the offer being made.
Aer Lingus shares closed on Tuesday at EUR2.38.
The offer remains conditional on securing the approval of both the Irish government and budget carrier Ryanair Holdings PLC, both of which hold substantial stakes in Aer Lingus, along with it securing regulatory approval in Europe and the UK. The Irish government, on Tuesday, however, said that it supports the takeover bid from IAG after it was confirmed that Aer Lingus would keep its existing slots at Heathrow airport. The Irish Parliament, the Dáil, still has to vote on the approval.
IAG said Aer Lingus will keep its current slots at Heathrow and will operate is current daily winter and summer scheduled flights between Heathrow and Dublin, Cork and Shannon for at least seven years after the acquisition. The Aer Lingus brand will also be maintained under the deal.
The Financial Times had reported earlier on Tuesday that the Irish government was set to approve the deal. Sources close to the matter said the government believed it has won significant concessions from IAG on the future of Aer Lingus' take-off and landing slots at Heathrow.
"Aer Lingus, Ireland and IAG would all benefit from this deal. Aer Lingus would maintain control of its brand and operation while gaining strength as part of a profitable and sustainable airline group in an industry that?s consolidating," said IAG Chief Executive Willie Walsh in the Aer Lingus statement Tuesday.
"Ireland?s vital air links to Europe and North America would be enhanced, creating new jobs, with cast-iron guarantees on ownership of Aer Lingus? Heathrow slots and their use on flights to Dublin, Cork and Shannon. Acquiring Aer Lingus would add a fourth competitive, cost effective airline to IAG, enabling us to develop our network using Dublin as a hub between the UK, continental Europe and North America, generating additional financial value for our shareholders," Walsh added.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
RYA.LInternational Airlines