AER Lingus yesterday urged its shareholders to reject rival Ryanair’s “rip-off” bid for the company as the war of words between the two airlines intensified.
Ryanair, Liverpool John Lennon Airport’s biggest carrier, is offering to buy Aer Lingus for around £705m – about half of what it offered in a failed bid two years ago.
In an effort to see off the takeover attempt, Aer Lingus yesterday told shareholders to ignore threats peddled by its budget rival.
In a letter, chairman Colm Barrington said Ryanair could not be allowed to take the former national carrier’s superior brand at a price which undervalues the airline.
Mr Barrington said Aer Lingus will make a profit this year despite the global airline industry losing billions of pounds.
“Aer Lingus has proven that it can compete with major flag carriers on the one hand and low-cost operators on the other,” Mr Barrington wrote.
“This is not a model to be sacrificed for the benefit of Ryanair and its shareholders.” Ryanair chief executive Michael O’Leary warned this week that the former national carrier’s future was bleak unless he was allowed to step in.
But Mr Barrington told shareholders that Ryanair was opportunistically trying to capitalise on market fears and uncertainties to gain access to Aer Lingus’s huge cash resources and valuable assets. “Do not let this rip-off happen,” he wrote.
He claimed Aer Lingus did not need to be rescued by Ryanair and that the takeover would create a monopoly.
“Ignore Ryanair’s threats, contradictions and insinuations,” he added. “The way to reject the offer is to take no action.”
Yesterday Ryanair poured scorn on Aer Lingus’ claim that it would make a profit in 2008.
Mr O’Leary said: “Aer Lingus have once again shown they cannot be trusted. Unfortunately for Aer Lingus shareholders, the reality is that Aer Lingus has incurred substantial – as yet undisclosed – exceptional costs, and companies have to pay tax, so the result will be another year of substantial net losses.
“It beggars belief that Aer Lingus claim – just one week before their year-end – they do not yet know the exceptional costs for 2008 (while still making a forecast), and it is insulting to Aer Lingus shareholders to pretend that the business is operating at a profit, when it is clearly going to make a substantial net loss this year.”
tonymcdonough
