Ryanair has launched another attempt to buy its Irish rival Aer Lingus with the tabling of a new €694 million bid.
The no-frills carrier, which already owns 29.8 per cent of Aer Lingus, is offering €1.30 per share, which is 38 per cent higher than Aer Lingus’ share price of €0.94 at the close of trading yesterday.
Aer Lingus' share price rose by around 25 per cent to €1.15 in early trading today on the London Stock Exchange.
Ryanair first took a minority shareholding in Aer Lingus in 2006 and launched a bid to take over the carrier during that year but the European Commission decided to ban the bid in 2007.
Ryanair's new bid comes just days after the UK’s Office of Fair Trading asked the Competition Commission to investigate the airline’s existing stake in Aer Lingus.
Michael O'Leary, chief executive of Ryanair, said: "This offer represents a significant opportunity to combine Aer Lingus with Ryanair, to form one strong Irish airline group capable of competing with Europe's other major airline groups led by Air France, British Airways and Lufthansa.
“This offer is, we believe, the best way for Aer Lingus to continue to be owned, controlled and managed from Ireland for the benefit of Irish citizens and visitors.
“With Ryanair's help, we believe that Aer Lingus can grow its traffic from a current figure of 9.5 million passengers (8.4 per cent fewer than its 2009 figure of 10.4 million) to over 14 million passengers over a five-year period post completion, by growing Aer Lingus' short-haul fleet to offer more competition at some of Europe's major airports where currently Aer Lingus operates and Ryanair has no desire to fly.
“Ryanair also believes that Aer Lingus' transatlantic operations from Ireland, which have been reduced in recent years will benefit from investment to grow materially over the same period.”
Aer Lingus said in a statement: "The board of Aer Lingus Group notes the announcement by Ryanair Holdings of its intention to make a third unsolicited offer for 100 per cent of the entire issued and to be issued share capital of Aer Lingus.
"Aer Lingus will make a statement in due course. In the meantime, Aer Lingus shareholders are urged to take no action."
Etihad Airways also took a stake of just under three per cent in Aer Lingus last month.
Report by Rob Gill