MICHAEL O’LEARY has launched a major attack on the board of management at rival airline Aer Lingus, over a letter issued by the flag-carrier last week.
O’Leary’s letter – which has been released to the public – disparages claims by Aer Lingus chairman Colm Barrington, who said last week that his board was dedicated to “creating value for Aer Lingus and all of its shareholders”.
The letter complains that Aer Lingus’s share price now leaves the company valued at €320m – when the airline has a net cash balance of over €350m.
“The market now attributes a value to the Aer Lingus business under your Board and Management of less than zero”, O’Leary blasts.
His letter complains that Aer Lingus rejected two takeover offers which valued shares at €2.80 and €1.40, but that the airline had recommended that shareholders reject the bids, claiming that Aer Lingus could still grow and become profitable.
“Many shareholders will find your description of this €1.40 per share offer as ”frivolous” to be a remarkable statement from a Chairman whose current share price of approx. €0.60 is less than half the value of this second offer which you personally recommended they reject,” the letter – dated yesterday – read.
Yesterday the airline’s shares traded at 65c each on the Irish Stock Exchange. Ryanair owns a 29.4 per cent stake in its rival.
The letter urged Aer Lingus to circulate a report on its practice of sacking staff and then rehiring them under more favourable conditions, to seek shareholder approval before making further payments to defined contribution pension schemes, and to consider a special dividend of 20c per share.
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