This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/5408780.stm

The article has changed 14 times. There is an RSS feed of changes available.

Version 11 Version 12
Aer Lingus rejects Ryanair offer Aer Lingus rejects Ryanair offer
(about 1 hour later)
Irish airline Aer Lingus has rejected a 1.48bn euro (£1bn; $1.9bn) takeover offer from budget rival Ryanair.Irish airline Aer Lingus has rejected a 1.48bn euro (£1bn; $1.9bn) takeover offer from budget rival Ryanair.
The board of Aer Lingus said the bid "significantly undervalues the group's businesses and attractive long term growth potential".The board of Aer Lingus said the bid "significantly undervalues the group's businesses and attractive long term growth potential".
Ryanair chief Michael O'Leary earlier said the bid was a "unique opportunity" to form a "strong" Irish airline. Proceedings in the Irish parliament, the Dail, were suspended earlier in the day as politicians argued the issue.
A merged group would have a 78% share of the London-Dublin route, raising concerns over competition issues.A merged group would have a 78% share of the London-Dublin route, raising concerns over competition issues.
Analysts have said the competition issues could be overcome if some routes were shed, but added that Ryanair would probably have to raise its bid significantly.Analysts have said the competition issues could be overcome if some routes were shed, but added that Ryanair would probably have to raise its bid significantly.
If the bid was successful, Ryanair said it planned to continue to operate the two airlines separately and compete on the 17 routes which both use. Government stake
Ryanair chief Michael O'Leary said the move was a "unique opportunity" to form a "strong Irish airline", carrying more than 50 million passengers each year.
If the bid was successful, he said the plan was to continue to operate the two airlines separately and compete on the 17 routes which both use.
It's a compelling opportunity for the government, for the staff and more importantly for the Irish economy and tourism Michael O'Leary, Ryanair chief executive From no-frills to flag carrierIt's a compelling opportunity for the government, for the staff and more importantly for the Irish economy and tourism Michael O'Leary, Ryanair chief executive From no-frills to flag carrier
The Irish government, owns 28.3% of Aer Lingus, said it would not sell its shares. However, Mr O'Leary said Ryanair would be "more than happy" for the government to retain its stake. The Irish government, which owns 28.3% of Aer Lingus, said it would not sell its shares.
Mr O'Leary said Ryanair would be "more than happy" for the government to retain its stake.
Transport minister Martin Cullen was due to answer special questions on the takeover approach in the Dail on Thursday afternoon.
Morning proceedings had been halted after Taoiseach Bertie Ahern refused opposition requests for a debate on the subject.
He said the government was committed to competition in the industry, but that the deal would need regulatory clearance from either the Irish authorities or the European Commission.
Earlier this week, Aer Lingus shares were floated on the stock market in London and Dublin. Shares began trading at 2.20 euros each, valuing the firm at 1.13bn euros.Earlier this week, Aer Lingus shares were floated on the stock market in London and Dublin. Shares began trading at 2.20 euros each, valuing the firm at 1.13bn euros.
Global competitorGlobal competitor
Ryanair said it had bought a 16% stake in Aer Lingus and was offering 2.80 euros per share for remaining stocks, a big premium for shareholders. Ryanair has bought a 16% stake in Aer Lingus and is offering 2.80 euros per share for the remaining shares.
News of the takeover approach pushed Aer Lingus shares up 11%, though Ryanair shares fell 2%. News of the takeover approach pushed Aer Lingus shares up 15%, though Ryanair shares fell 1%.
AER LINGUS FACTS Low-cost airline focussing on passenger transportFleet of 35 aircraft 11 routes from Ireland to the UK57 routes from Ireland to mainland EuropeLong-haul flights to US and UAE Aer Lingus share priceAER LINGUS FACTS Low-cost airline focussing on passenger transportFleet of 35 aircraft 11 routes from Ireland to the UK57 routes from Ireland to mainland EuropeLong-haul flights to US and UAE Aer Lingus share price
The flotation followed a decision by the Irish government to sell much of its 85.1% share in the company. Workers now have a 9.85% stake.The flotation followed a decision by the Irish government to sell much of its 85.1% share in the company. Workers now have a 9.85% stake.
If accepted, the Irish Government would get more than 500m euros from the sale and Aer Lingus employees would gain 200m euros, Ryanair said.If accepted, the Irish Government would get more than 500m euros from the sale and Aer Lingus employees would gain 200m euros, Ryanair said.
'Compelling opportunity' Shedding routes
"This offer represents a unique opportunity to form one strong airline group for Ireland and for European consumers", Mr O'Leary said. The second largest union at Aer Lingus, Impact, is opposing the proposed takeover saying a stand-alone Aer Lingus was "in the best interests of the company, the country, passengers and staff".
"It's a compelling opportunity for the government, for the staff and more importantly for the Irish economy and tourism," the airline boss added. "There are clearly significant competition issues involved in the proposed takeover, which would create a near-monopoly on passenger air travel in and out of Ireland with obvious adverse implications for passengers and society," a spokesman added.
He said that a combined firm would carry more than 50 million passengers annually and would be "capable of competing on the European and World stage against other large European airline groups".
RYANAIR FACTS Fleet of 107 aircraft Orders for a further 281 Boeing 737-800s372 routes 38.9 million passengers in the year to September 2006 Ryanair share priceRYANAIR FACTS Fleet of 107 aircraft Orders for a further 281 Boeing 737-800s372 routes 38.9 million passengers in the year to September 2006 Ryanair share price
Ryanair said that if the deal went through Aer Lingus would be able to cut the price of its short-haul fares and its fuel surcharge.Ryanair said that if the deal went through Aer Lingus would be able to cut the price of its short-haul fares and its fuel surcharge.
It also said it would be able to improve Aer Lingus' long-haul service and its cargo division.It also said it would be able to improve Aer Lingus' long-haul service and its cargo division.
The deal could get clearance by competition regulators, but some routes may have to be shed, said Exane BNP Paribas analyst Nick van den Brul.The deal could get clearance by competition regulators, but some routes may have to be shed, said Exane BNP Paribas analyst Nick van den Brul.
"There would almost certainly be a competition investigation by the EU but it doesn't look insurmountable," he said."There would almost certainly be a competition investigation by the EU but it doesn't look insurmountable," he said.
The second largest union at Aer Lingus, Impact, is opposing the proposed takeover saying a stand-alone Aer lingus was "in the best interests of the company, the country, passengers and staff".
"There are clearly significant competition issues involved in the proposed takeover, which would create a near-monopoly on passenger air travel in and out of Ireland with obvious adverse implications for passengers and society," a spokesman added.