AER LINGUS HAS rejected a buy-out offer from the owner of British Airways.
IAG has confirmed that it has submitted an offer for the Irish national carrier but that the Aer Lingus board has turned it down.
A follow-up offer has not however been ruled out by IAG which said in a statement that there is “no certainty that any further proposal or offer”.
“A further statement will be made if and when appropriate,” an IAG statement added.
Aer Lingus says that the proposed deal was rejected on Tuesday after the board felt that the offer “fundamentally undervalues Aer Lingus”.
Aer Lingus also said it “strongly urged” shareholders to take no action.
IAG was formed by the merger of British Airways and Spain’s Iberia and is led by former Aer Lingus CEO Willie Walsh.
Walsh was boss of Aer Lingus between 2001 and 2005 before he took the reins at British Airways.
In reaction to the surprise announcement, Aer Lingus shares soared by more than 7% on the Irish Stock Exchange.
Ryanair is the biggest single shareholder in Aer Lingus and has made three failed attempts to buy the airline since 2007.
In early 2013, the European Commission barred Ryanair’s third attempt to take over Aer Lingus, citing concerns that the interests of passengers would be badly affected.
Ryanair still owns 29.8% of Aer Lingus, while the State owns 25.1%.
British authorities had ordered Ryanair last year to slash its holding to 5% on grounds of unfair competition, but the group is appealing the ruling.
Additional reporting from © – AFP 2014
To embed this post, copy the code below on your site
have your say