UK: Aer Lingus shareholders urged to reject takeover bid by rival airline Ryanair
Aer Lingus has published a 30-page circular calling on its shareholders to reject a revised takeover bid by rival airline Ryanair.
As the former State carrier reported an operating loss of 4.4 million euro (�3.4million) in the first six months of the year, it again claimed the offer undervalues the business.
Ryanair offered 1.30 euro (�1.02) a share.
Christoph Mueller, Aer Lingus’s chief executive, said the airline has produced a good trading performance in the seasonally weak environment.
It reported an 83.6% reduction it its operating loss so far in 2012, from 26.8 million euro (�20.9 million) in the same period last year.
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“The group’s operating loss of 4.4 million euro represents a significant improvement over the prior year,” he said.
“These results clearly demonstrate that our strategy of building a leaner and more efficient Aer Lingus is working.”
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In its circular to shareholders, which includes the Irish Government, Aer Lingus outlined how Ryanair’s first offer was prohibited in 2007 on competition grounds, adding that those reasons are now even stronger than before.
And it maintained that its strategy is working, saying that Aer Lingus is a strong and profitable business.
Its financial results show revenue has increased by 10% compared with a year earlier, while operating costs increased by 5.8% - largely due to a 29.6% increase in fuel costs and an 8.1% increase in airport charges.
Long-haul performance remained strong, with passenger volumes and yield up, and retail revenue also rose.
Mr Mueller said he will continue to focus on operational and financial performance during the summer travel months and believes its operating profit, before net exceptional items, will be at least the 49 million euro (�38.3 million) achieved last year.
However staff are being balloted for industrial action over pension concerns.
Aer Lingus maintains that a takeover would mean the number of routes which Ryanair monopolises would sharply increase and claims it has legal advice that the European Commission is likely to again ban the takeover.
“The Board of Aer Lingus has unanimously recommended that shareholders reject Ryanair’s offer by taking no action,” Mr Mueller added.