Ryanair has agreed to sell its minority stake in Aer Lingus to any EU airline interested in acquiring the company in a last-ditch effort to stave off regulatory action from U.K. competition authorities.
Europe’s largest low cost airline by revenue made the offer on Tuesday, saying it would unconditionally sell its 29-per-cent shareholding in its Irish rival to any EU airline that wants to buy Aer Lingus and that obtains acceptances from 50.1 per cent of shareholders.
“This remedy unconditionally removes any ability by Ryanair to block any future takeover of Aer Lingus by another EU airline,” said Robin Kiely, Ryanair’s head of communications.
He said the unconditional offer by Ryanair removed “any remaining shred of credibility” from the UK competition authorities’ investigation into Ryanair’s minority stake in its Irish rival.
In May the U.K. Competition Commission made a provisional ruling, which said that allowing Ryanair to maintain its 29-per-cent stake in Aer Lingus could reduce competition on routes between the U.K. and Ireland. It also found the stake could hinder another airline’s ability to acquire or merge with Aer Lingus. The commission is due to make a final decision by September 5 on whether Ryanair should be forced to sell all or part of its stake in Aer Lingus.
Analysts said the unconditional offer was part of Ryanair’s battle with the U.K. competition authorities to be allowed to retain its minority stake.
“This does not change the game in our view, but gives Ryanair a counter argument to the U.K. Competition Commission’s suggestion that it is blocking any potential takeover of Aer Lingus,” said Donal O’Neill, analyst with Goodbody stockbrokers.
“It gives Ryanair a hook with which to appeal any negative decision by the commission,” he said.
The commission has the power to order companies to divest a minority stake if it finds the holding enables the owner to influence the behaviour and policies of a target company in a way that harms competition.
In 2010, BSkyB was forced to sell 10 per cent of a 17.9-per-cent minority stake that it held in ITV when the commission found the shareholding would give rise to a substantial lessening of competition.
Ryanair’s battle with the Competition Commission is the latest twist in the airline’s long-running campaign to retain some control over Aer Lingus. Last year EU regulators blocked Ryanair’s third bid in eight years to take over Aer Lingus, ruling that the proposed transaction would increase fares for passengers and create a monopoly on 46 U.K.-Irish routes.Report Typo/Error