Ryanair has announced that it intends to make an all cash offer of €1.30 per share for Aer Lingus.
In a statement to the Irish Stock Exchange, the airline said the offer values Aer Lingus at approximately €694m.
Ryanair already owns 29.82% of Aer Lingus in a stake acquired over five years ago.
The stake was reviewed by the European Union and has recently been referred by the UK Office of Fair Trade to the UK Competition Commission.
Ryanair will make the offer through a wholly owned subsidiary, Coinside Ltd.
The 29.8% stake was acquired for the most part by Ryanair between late 2006 and early 2007.
Ryanair said the cash offer represents a premium of 38.3% over the Aer Lingus closing price.
A spokesperson for Aer Lingus said it had no comment to make on the Ryanair bid.
Ryanair said it believes that the future of the Aer Lingus will be best served as part of Ryanair and that Ryanair will be one of five large airline groupings in Europe as the market consolidates.
The Ryanair statement also notes the context of the offer in that European airlines are consolidating, Dublin airport is operating at 50% capacity, that the Government is selling its 25% share in Aer Lingus and has committed to the Troika to do so.
It notes Etihad's 3% stake and its reported "strong interest" in Aer Lingus.
The Ryanair statement notes that the Employee Share Ownership Trust (ESOT) no longer controls 15% of Aer Lingus.
Ryanair says that its confident that 50% of Aer Lingus shareholders will accept the offer.
Transport Minister Leo Varadkar said he had only just become aware of the Ryanair bid.
He said he would have to study it and discuss it further with his Cabinet colleagues before making any further comment.
Ryanair willing to move to allay competition fears
Ryanair says it is confident that the European Commission will approve the deal, if successful, and says the airline is willing to offer appropriate remedies to allay any competition concerns.
Michael O'Leary says the offer represents a significant opportunity to create one strong Irish airline group.
In a statement, he said it represents the best opportunity for Aer Lingus to grow, not only in Europe but also in terms of transatlantic traffic.
He said Ryanair's performance contrasts with that of Aer Lingus and that in six years as a public company, Aer Lingus has failed to deliver value for shareholders.