The Government has rejected Ryanair's offer of €1.40 per share for its 25% shareholding in Aer Lingus. Transport Minister Noel Dempsey said the Government believed the Ryanair offer greatly undervalued Aer Lingus and would have a significant negative impact on competition in the market.
'Because we live on an island Irish consumers depend very heavily on air transport. A monopoly in this area would not be in the best interests of Irish consumers,' Minister Dempsey said.
Ryanair said it was disappointed by the Government decision, but would respect and abide by it. The airline said the decision meant Ryanair's offer would not be successful, as it could not achieve acceptance by 90% of shareholders.
Ryanair said it believed the Government's decision was wrong. 'Ryanair will now focus all of our energies on continuing to successfully grow and develop Ireland's biggest airline,' chief executive Michael O'Leary said.
Aer Lingus, United eye closer links
Earlier, Ryanair had warned Aer Lingus shareholders that time is running out for them to accept its offer for the airline.
It pointed out that the deadline for acceptances is February 13, while the deadline for Ryanair to make a decision to amend any of the terms of the offer is Friday January 30.
Ryanair's chief executive Michael O'Leary said he was willing to look at small amendments to the offer price. If time runs out on the current offer, Mr O'Leary said that he can not rule out, or rule in, another future offer for the airline. He also recommended that the Government sell its Aer Lingus stake to Ryanair.
In Dublin, Aer Lingus shares closed down four cent at €1.35, but Ryanair gained 11 cent to €3.03.
