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Ryanair Makes $880m Cash Bid For Aer Lingus  
User currently offlinebtblue From United Kingdom, joined Mar 2004, 578 posts, RR: 4
Posted (2 years 4 months 2 weeks 14 hours ago) and read 16218 times:
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As subject:

http://uk.reuters.com/article/2012/0...r-aer-lingus-idUKBRE85I19920120619

They have made an $880m bid for the Irish national carrier Aer Lingus. Currently breaking news.

Wonder is IAG will make a counter offer?

Ryanair are a 29% shareholder in Aer Lingus currently.

[Edited 2012-06-19 10:37:11]

[Edited 2012-06-19 10:37:33]


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61 replies: All unread, showing first 25:
 
User currently offlineClassicLover From Ireland, joined Mar 2004, 4646 posts, RR: 23
Reply 1, posted (2 years 4 months 2 weeks 13 hours ago) and read 16047 times:

Well this is going to be interesting!

Quoting btblue (Thread starter):
Wonder is IAG will make a counter offer?

IAG have recently said they won't be doing any acquisitions in the near future - though this could tip their hand. I'd rather see IAG have the airline than Lufthansa Group or Air France/KLM, quite frankly.

Quoting btblue (Thread starter):
Ryanair are a 29% shareholder in Aer Lingus currently.

Indeed. Aer Lingus web site says they had €894.8m cash on hand at 31 December 2011... so I still believe the offer is low. The offer of €1.30 per share isn't bad, considering the share price of Aer Lingus has been floating around between €0.90 and €1.00 for quite a long time now.



I do quite enjoy a spot of flying - more so when it's not in Economy!
User currently offlineRevelation From United States of America, joined Feb 2005, 12761 posts, RR: 25
Reply 2, posted (2 years 4 months 2 weeks 13 hours ago) and read 15997 times:

First the Euro 2012 loss, now this! 


Inspiration, move me brightly!
User currently offlineMD11Engineer From Azerbaijan, joined Oct 2003, 14096 posts, RR: 62
Reply 3, posted (2 years 4 months 2 weeks 13 hours ago) and read 15955 times:

Quoting ClassicLover (Reply 1):
Quoting btblue (Thread starter):
Ryanair are a 29% shareholder in Aer Lingus currently.

Indeed. Aer Lingus web site says they had €894.8m cash on hand at 31 December 2011... so I still believe the offer is low. The offer of €1.30 per share isn't bad, considering the share price of Aer Lingus has been floating around between €0.90 and €1.00 for quite a long time now.

This gives them enough leverage to veto any management decision to get Aer Lingus more profitable. But i doubt that the competition watchdog will let FR get the monopoly on traffic to and from Ireland.

Jan


User currently offlineTeamInTheSky From United States of America, joined Apr 2011, 535 posts, RR: 0
Reply 4, posted (2 years 4 months 2 weeks 13 hours ago) and read 15952 times:

Why is FR so keen on buying EI? Isn't this like the third time they are attempting to aquire?

I know EI isn't the full service carrier they once were, but I don't understand the benefit unless it is to simply take out Irish competition. For the country of Ireland, I sure hope your only option doesn't become FR!



Since 2010: DL, KL, AF, WX, IG, FR , FL, U2, AK, BA, OK, UX, VS, VN, K6
User currently offlineRevelation From United States of America, joined Feb 2005, 12761 posts, RR: 25
Reply 5, posted (2 years 4 months 2 weeks 13 hours ago) and read 15926 times:

Quoting TeamInTheSky (Reply 4):
Why is FR so keen on buying EI? Isn't this like the third time they are attempting to aquire?

IMHO it's the TATL routes, which are much easier to buy than set up on your own.



Inspiration, move me brightly!
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3922 posts, RR: 9
Reply 6, posted (2 years 4 months 2 weeks 13 hours ago) and read 15895 times:

Quoting TeamInTheSky (Reply 4):
Why is FR so keen on buying EI? Isn't this like the third time they are attempting to aquire?

I dont see this going very far. It is quite clear that neither the EU, Irish nor UK competition authorities will allow this deal through. My guess is that Ryanair is looking to offload the stake and this is effectively putting cards on the table, it is now up to IAG, AF/KL, LH any middle eastern carrier that might be interested and other institutional investors to get involved.



Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineClassicLover From Ireland, joined Mar 2004, 4646 posts, RR: 23
Reply 7, posted (2 years 4 months 2 weeks 13 hours ago) and read 15708 times:

Quoting TeamInTheSky (Reply 4):
I know EI isn't the full service carrier they once were, but I don't understand the benefit unless it is to simply take out Irish competition. For the country of Ireland, I sure hope your only option doesn't become FR!

What gets me each time that Ryanair make a bid is that they promise that Aer Lingus will remain in its current form and that they will make the airline grow.

To me it makes sense, from the perspective that EI and FR serve completely different markets out of Ireland. Aer Lingus serve all the main airports throughout their European network, offer premium frills like Business Class across the Atlantic, lounge access and so on.

I don't see why they can't make contractual assurances to that effect and be bound to that.

Quoting BrianDromey (Reply 6):
I dont see this going very far. It is quite clear that neither the EU, Irish nor UK competition authorities will allow this deal through. My guess is that Ryanair is looking to offload the stake and this is effectively putting cards on the table, it is now up to IAG, AF/KL, LH any middle eastern carrier that might be interested and other institutional investors to get involved.

I tend to agree with you there. It may work out that some other airline group will offer even more money and then Ryanair can offload their stake with minimal losses. We shall see what happens.

Now I wait for the usual Irish media frenzy against Ryanair for this... for such a successful Irish company, they certainly are dragged through the dirt in the media. Though a lot of that, it has to be said, is as a result of their own strategy and marketing.



I do quite enjoy a spot of flying - more so when it's not in Economy!
User currently offlineKBJCpilot From United States of America, joined May 2012, 177 posts, RR: 6
Reply 8, posted (2 years 4 months 2 weeks 13 hours ago) and read 15648 times:

Time to sit back and watch the fireworks. This should be interesting.

Ryanair to the USA after buying Aer Lingus- talk about a miserable flight.



Samsonite, I was way off!
User currently offlinestlgph From United States of America, joined Oct 2004, 9428 posts, RR: 26
Reply 9, posted (2 years 4 months 2 weeks 13 hours ago) and read 15623 times:

RyanAir is offering a 38.3% premium over today's closing stock value price.

Analysts tell me RyanAir believes Aer Lingus' current traffic of 9.5 million passengers can be 14 million 5 years after the merger.



if assumptions could fly, airliners.net would be the world's busiest airport
User currently offlineba319-131 From United Kingdom, joined Jan 2001, 8564 posts, RR: 54
Reply 10, posted (2 years 4 months 2 weeks 13 hours ago) and read 15513 times:
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Setting the transatlantic routes aside, I don't see what FR see in EI.

Bar the LHR routes, which I doubt FR would operate due to congestion hitting their precious on time figures, they can open routes to compete with EI and potentially knock them out of the route.

It does seem FR are keen to be the only nationa player out of Ireland, if this happens it's a great shame for the Irish traveller.



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User currently offlineDocLightning From United States of America, joined Nov 2005, 20013 posts, RR: 59
Reply 11, posted (2 years 4 months 2 weeks 13 hours ago) and read 15440 times:

Quoting ClassicLover (Reply 7):
Now I wait for the usual Irish media frenzy against Ryanair for this... for such a successful Irish company, they certainly are dragged through the dirt in the media. Though a lot of that, it has to be said, is as a result of their own strategy and marketing.

Actually, that seems to be their marketing strategy; make as much negative press as possible because negative press=free press.


User currently offlineOA260 From Ireland, joined Nov 2006, 27171 posts, RR: 60
Reply 12, posted (2 years 4 months 2 weeks 13 hours ago) and read 15439 times:

Quoting ba319-131 (Reply 10):
It does seem FR are keen to be the only nationa player out of Ireland, if this happens it's a great shame for the Irish traveller.

Indeed it would be a disaster and Id rather see FR threaten to cut more routes out of Ireland than see FR the monopoly after any take over. Anyway it wont happen they know it wont . It will be blocked by the powers that be. I just hope that FR sell their stake to another carrier that will enhance EI rather than disrupt or try to disrupt it .


User currently offlineshamrock350 From Ireland, joined Mar 2005, 6348 posts, RR: 14
Reply 13, posted (2 years 4 months 2 weeks 13 hours ago) and read 15372 times:

Quoting ClassicLover (Reply 7):
What gets me each time that Ryanair make a bid is that they promise that Aer Lingus will remain in its current form and that they will make the airline grow.

That's what Ryanair promises now and it sounds great, I'd love to see a thriving Aer Lingus with passenger numbers hitting 14 million but with Ryanair in the driving seat you have to ask at what cost it would come for the airline, staff and passengers?

Quoting OA260 (Reply 12):
I just hope that FR sell their stake to another carrier that will enhance EI rather than disrupt or try to disrupt it .

*cough* Etihad *cough*


User currently onlinekaitak From Ireland, joined Aug 1999, 12526 posts, RR: 35
Reply 14, posted (2 years 4 months 2 weeks 12 hours ago) and read 15099 times:

It's just FR looking for notice; they know this hasn't a dog's chance of getting anywhere. The competition authorities won't wear it for a start; as it is, the British competition authority is looking into FR's existing holding in EI; I am just wondering what FR's gameplan is here. Is it trying to force someone's hand?

Just as a matter of interest, does anyone recall what FR paid for its EI shareholding (and the price per share) when it first bought it? How much would they lose at today's stock prices if they were forced to sell?


User currently offlinespiritair97 From United States of America, joined Jan 2011, 1231 posts, RR: 0
Reply 15, posted (2 years 4 months 2 weeks 12 hours ago) and read 15083 times:

God I hope that FR does NOT get EI. I could not stand to see Ryanair coming to the USA. It's exactly the same as if NK bought DL or UA.

User currently onlineMortyman From Norway, joined Aug 2006, 4008 posts, RR: 1
Reply 16, posted (2 years 4 months 2 weeks 12 hours ago) and read 14954 times:

Maybe FR can't stand the thought of DY going transatlantic first ....  

User currently offlinetonystan From Ireland, joined Jan 2006, 1444 posts, RR: 2
Reply 17, posted (2 years 4 months 2 weeks 11 hours ago) and read 14711 times:

Quoting ba319-131 (Reply 10):
Bar the LHR routes, which I doubt FR would operate due to congestion hitting their precious on time figures, they can open routes to compete with EI and potentially knock them out of the route.

Truth of the matter is that FR have competed directly with EI on many routes yet EI seem to have remained!

The dedicated EI customer base cannot be underestimated in all of this. So much has been thrown at this little airline for so long yet they are still here and all things considered (especially with the economic situation in Ireland) they are doing pretty damn good right now.

We are right to question what MOL sees in EI because Im sure its something very good that perhaps we are missing. He wouldnt be interested otherwise....well except unless maybe is pride is making him do it and thats just not shrude business behaviour!  



My views are my own and do not reflect any other person or organisation.
User currently offlineshamrock604 From Ireland, joined Sep 2007, 4203 posts, RR: 12
Reply 18, posted (2 years 4 months 2 weeks 11 hours ago) and read 14615 times:

Quoting ClassicLover (Reply 7):
Now I wait for the usual Irish media frenzy against Ryanair for this... for such a successful Irish company, they certainly are dragged through the dirt in the media. Though a lot of that, it has to be said, is as a result of their own strategy and marketing.

I completely disagree. If anything, the denizens of the main papers seem to laud O'Leary as their little champion, and would only love to see a former state body sold off to teach those pesky workers a thing or two.

Quoting ba319-131 (Reply 10):
Bar the LHR routes, which I doubt FR would operate due to congestion hitting their precious on time figures, they can open routes to compete with EI and potentially knock them out of the route.

The thing is it is EI who are giving FR a drubbing! EI just started ARN, and it's doing very well, while FR are having to strategically cancel certain underperforming sectors on the NYO route. FR continue to contract at DUB, while EI are opening new routes and growing. The Aer Lingus regional product is the perfect weapon to compete with FR on routes to the UK regions and Ryanair are feeling it.

Nobody has competed as viciously with FR for as long as EI - they know what they need to do.

Quoting Mortyman (Reply 16):
Maybe FR can't stand the thought of DY going transatlantic first ....  

I dont think Ryanair really make any decisions with reference to Norwegian.

Quoting tonystan (Reply 17):
The dedicated EI customer base cannot be underestimated in all of this. So much has been thrown at this little airline for so long yet they are still here and all things considered (especially with the economic situation in Ireland) they are doing pretty damn good right now.

Public opinion is turning against FR - EI offers a product at a price point people can live with, and a product that pitches at a level sufficiently above FR that people find appealing. It gets rid of the worst "excesses" of FR like the boarding scrum, the "in your face" cabins etc etc while maintaining a legacy ethos in some areas. As FR get more expensive, the EI product becomes a better value proposition.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlinelightsaber From United States of America, joined Jan 2005, 13302 posts, RR: 100
Reply 19, posted (2 years 4 months 2 weeks 11 hours ago) and read 14550 times:
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Quoting shamrock350 (Reply 13):
*cough* Etihad *cough*

If this is a strategy to flush out a new bid, there would be worse partners to consider.


This is an interesting turn of events. I do not see the value of FR owning EI. I'll be watching the fireworks.  

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineEagleBoy From Niue, joined Dec 2009, 1853 posts, RR: 2
Reply 20, posted (2 years 4 months 2 weeks 9 hours ago) and read 13654 times:
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Quoting TeamInTheSky (Reply 4):
Why is FR so keen on buying EI? Isn't this like the third time they are attempting to aquire?

-Eliminate the home opposition.
-Do it BEFORE the UK OFT forces FR to sell their share holding.
-Acquire the AOC for access to the US.
-Sell off/takeover the EI shorthaul network.
-Gain total dominance over the DUB owner (DAA)
-Feed pax from all over Europe in "Irelands new LCC T/A airline"
-Acquire the EI cash pile.
-Finally knock that chip of MoL's shoulder.


User currently offlineshamrock604 From Ireland, joined Sep 2007, 4203 posts, RR: 12
Reply 21, posted (2 years 4 months 2 weeks 9 hours ago) and read 13389 times:

Quoting EagleBoy (Reply 20):
Acquire the EI cash pile.

This is the most interesting part! EI have a cash pile of about 900m euros - so the bid actually values EI at less than zero!

Part of the reason for that is that FR's presence on the list of shareholders actually depresses the share price.

A buyer of EI gets 900m cash, a fleet of nearly 50 pretty new airbus aircraft, 24 daily slot pairs at LHR, slots at all of Europe's major airports in fact, plus an airline that has delivered solid profits when the economy of it's homeland is in the doldrums.

Pretty good deal - and exactly why it will not be accepted.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlinePoianaMarco From Denmark, joined Jan 2012, 22 posts, RR: 0
Reply 22, posted (2 years 4 months 2 weeks 9 hours ago) and read 13249 times:

Tell you the truth no matter what or where or when, I´d rather fly with FR instead EI. Hopefully FR will manage buying EI, in this way everyone is happy..  


The secret behind a good working day is happy guests and to know that you have been giving 110% and not just 100 of seri
User currently offlinejfk777 From United States of America, joined Aug 2006, 8437 posts, RR: 7
Reply 23, posted (2 years 4 months 2 weeks 9 hours ago) and read 13163 times:
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Quoting shamrock604 (Reply 21):
A buyer of EI gets 900m cash, a fleet of nearly 50 pretty new airbus aircraft, 24 daily slot pairs at LHR, slots at all of Europe's major airports in fact, plus an airline that has delivered solid profits when the economy of it's homeland is in the doldrums.

Given the fact Ryannair owns 29% of Aer Lingus they are only out about 600m in cash, tey get 900m in cash and 24 LHR slots worh a 1,000,000,000 Dollars.


User currently offlineshamrock604 From Ireland, joined Sep 2007, 4203 posts, RR: 12
Reply 24, posted (2 years 4 months 2 weeks 9 hours ago) and read 13098 times:

Quoting PoianaMarco (Reply 22):
Tell you the truth no matter what or where or when, I´d rather fly with FR instead EI. Hopefully FR will manage buying EI, in this way everyone is happy..  

You are entitled to your opinion, but surely dont try to claim everybody is happy, because they most certainly are not.

Nobody sane wants a monopoly on air transport in an Island market.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
25 mainMAN : Could someone explain to me what a potential FR acquisition of EI would have to do with UK competition authorities? (they're 2 Irish companies aren't
26 shamrock604 : The view is that because the IRL / UK air travel market is so dominated by the two Irish airlines, that a lessening of competition has a detrimental
27 mainMAN : OK thanks, I see. My initial thought about that is.......as the UK/Ireland market is a free one, UK based airlines are completely free to start any c
28 Viscount724 : What value do US-EU routes have? It's Open Skies. Any US or EU-based carrier can fly anywhere they want.
29 shamrock604 : Of course that is true. But the authorities know that this wont happen for a number of reasons: 1) BA co-operate with Aer lingus 2) BMI is no more 3)
30 shamrock604 : The thinking seems to be that people would run a mile from a Ryanair Flight across the Atlantic (understandable), and that as EI already enjoy recogn
31 MillwallSean : Whats the point? No matter what they offer the possible combination of Aer Lingus and Ryanair has already been turned down by the EU. They wont allow
32 greenjet : Yes, but don't forget they would also pick up EI's debt and liabilities, etc. too. Finance lease obligations alone amounted to more than 575m euro as
33 bestwestern : Yet again FR throws EI into dissary and causes significant management time to be spent on fighting off an unwanted takeover plan, rather than on runni
34 shamrock604 : Indeed. You'd imagine he would have actually learned by now. Every time he challenges the EU, they find a way to make air fares more expensive, or di
35 bestwestern : Nobody tells St Michael what to do, and that is his weakness.
36 Post contains images Byrdluvs747 : Let's not forget a pension funding deficit of 700+ million euros. Despite Walsh's comments regarding EI, I also hope for IAG intervention.
37 shamrock604 : Aer Lingus have NO contractual obligation to pay into that fund - no matter what it's staff may think.
38 Post contains images PHX787 : but the problem is, what would come from the combined airline? Wait a second, would the combined airline be a low-cost carrier? In comparison on rout
39 Giancavia : What weakness is it, Remind me the last time Ryanair lost money. They are rolling in it because of him.. dudes an ass but he has no weakness.
40 Burkhard : IF it is the intention to finally start A TATL low price network, then Ireland has the best location you can think of. You can reach all of the US usi
41 anfromme : Couldn't disagree more. Remember the whole Hangar 6 farce? It was a long time until I saw the first reports in Irish media questioning Ryanair's supp
42 B738FlyUIA : That would for TATL only or within Europe also?
43 bestwestern : Someone with no weakness? Really? Is St Michael God or something? Ryanair is bigger than O'Leary, and the company will survive without him. He runs t
44 Bongodog1964 : Once again we have people suggesting non EU buyers for EU airlines, regulations prevent any non EU airline owning a majority stake, this leaves them
45 Post contains images Pe@rson : Of course he has made mistakes. Who hasn't? One is not being more aggressive to his revenue team to increase ancillary revenue on a per-passenger bas
46 Bongodog1964 : Perhaps he has been too aggressive with the revenue team, there is a limit to what passengers will pay for ancillary items, in particular the baggage
47 Post contains images Pe@rson : I understand what you said - charge less and your total revenue will increase, which assumes, of course, sufficient price-elasticity. Still, your arg
48 babybus : No country should have a cheap LCC as its national airline. Solely on those grounds I wouldn't like to see FR buy out EI. Ei isn't the best airline in
49 anfromme : I'd say that an FR-owned EI could say good-bye to pretty much all of its major code-shares, i.e. BA, KL and UA. Only the codeshare with B6 might have
50 grimey : The Aer Lingus share price is up over 12% today and if FR own 29% of the company doesn't that increase their balance sheet? If so could this mean: 1)
51 goosebayguy : If you own 30% of an airline you've been told you cannot take over how do you cash in your 30% without the price crashing? Easy announce a silly bid f
52 steve6666 : Well an easier - and more legal - way might be to just pay an investment bank to go and find someone who will take the 30% off your hands. If you dum
53 Post contains links anfromme : Well of course FR will maintain that they are dead serious about the takeover. But seriously, what exactly makes them believe that they'll be success
54 EagleBoy : Funny you should make this point as the EI ancillary revenue per pax was approx E18 in 2011, approx $24. Thus killing th brand and playing into FR ha
55 shamrock604 : The sad thing about the whole affair is that O'Leary proposals - at least on paper, actually hold very considerable merit. The notion of combining of
56 Post contains images sweair : Smart to pump the stock and hope someone buys what you unload..FR can make more money this way than flying cheap passengers..
57 Bongodog1964 : Rather a cheap LCC national airline than the scenario sometimes seen in the 3rd world of a dangerous national airline. To my mind the worst part of t
58 Post contains images anfromme : "Little control" might be a bit of an exaggeration, but it's true that no non-EU airline would be able to buy EI outright. Etihad still doesn't seem
59 irishtexan : Can't see this happening. Sounds more like a play to somehow divest themselves of their existing shareholding ahead of further UK regulatory developme
60 tayaramecanici : Add to this - Increase the bargaining chip with A and B. Rumour has it that MoL is not being entertained by Boeing, ownership of an all Airbus airlin
61 shamrock604 : That is not going to make any difference to the Competition watchdogs. The issue is not the ownership of EI/FR, it is the competitive landscape. It m
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