AER Lingus is preparing to defend it self against the latest bid by rival Ryanair to gain operating control.
The former Irish flag carrier has published a 30-page circular calling on its shareholders to reject the takeover bid.
Aer Lingus has reported an operating loss of €4.4 million in the first six months of this year. Despite this, the airline is asserting that Ryanair is undervaluing it with its bid of €1.30 a share.
Christoph Mueller, Aer Lingus’s chief executive, said the airline has produced a good trading performance in a seasonally weak environment.
“The group’s operating loss of €4.4 million represents a significant improvement over the prior year. These results clearly demonstrate that our strategy of building a leaner and more efficient Aer Lingus is working,” Mueller said.
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In its circular to shareholders, Aer Lingus pointed out that Ryanair’s first takeover bid was stymied in 2007 on competition grounds and that those same reasons were now even more pertinent than before.
“The board of Aer Lingus has unanimously recommended that shareholders reject Ryanair’s offer by taking no action,” said Mueller.
He added that the board was enjoying the support of shareholders because very few of them had sold their shares.
Separately, the Irish Examiner reported that Mr. Mueller said that following on from the code-sharing agreement with the Middle East-based airline Etihad, Aer Lingus was now in the early stages of exploring cost-saving measures with Etihad.
Ryanair is seeking European Union regulatory approval for its takeover bid. The European Commission, which acts as EU competition watchdog, has indicated that it will decide by August 29 whether or not to clear the deal.
The commission vetoed Ryanair’s 2007 attempted takeover of Aer Lingus. The budget carrier already owns just under 30 percent of Aer Lingus, while the Irish government retains a 25 percent stake.x