Aer Lingus, in a document which tells shareholders to reject Ryanair's offer, describes Michael O'Leary's bid as ill-conceived, contradictory and anti-competitive.
It says the bid of €2.80 a share undervalues Aer Lingus and ignores its excellent prospects as an independent company.
In today's so-called defence document, Aer Lingus says it has a target of a 15% return annually on its investment in new aircraft.
Today's document says that the performance of Aer Lingus over the past five years has been among the best in the industry. It says it almost halved its costs since 2001 and has a 'relentless focus' on reducing costs.
It adds that the airline has significant growth prospects on its short-haul and on long-haul businesses, where it is in a prime position for 'exceptional long-term growth' following the delivery of an Open Skies agreement. It points out that Aer Lingus grew its short-haul business out of Dublin three times faster than Ryanair last year
'The Ryanair offer does not allow for these prospects and it prices Aer Lingus at a significant discount to both its European peers and precedent Irish transactions,' the document states.
Aer Lingus Chairman John Sharman said that over the past five years, the airline has been substantially transformed. 'Faced with a strong, well-capitalised and independent Aer Lingus, Ryanair has reacted in a hostile, anti-competitive manner designed to eliminate a rival at a derisory price,' he said.
'Our product offering is superior to Ryanair's and passengers prefer to fly with Aer Lingus. We have excellent growth opportunities and we have the fleet, staff, capital resources and management to deliver for shareholders,' he concluded.
Aer Lingus CEO Dermot Mannion says the airline's recent successful flotation has given the airline the capital it needs for the future. 'We now have tremendous opportunities ahead to build on the strong platform we have put in place,' he said.
'Don't lose out on the opportunities that lie ahead for Aer Lingus. Don't sell your shares,' he strongly urges shareholders.
Advice from the Central Representative Council, which speaks for the main unions at Aer Lingus, has also been posted to shareholders today.
When asked if a bid at a higher price from Ryanair could win the backing of shareholders, Aer Lingus CEO Dermot Mannion said he could not conceive of any circumstances where a bid from Michael O'Leary would succeed.
Aer Lingus shares closed up one cent at €2.87 in Dublin this evening.
