Aer Lingus ‘to accept’ bid from British Airways owner IAG

Aer Lingus 'to accept' bid from British Airways owner IAG

Irish airline Aer Lingus is set to approve a new takeover bid by British Airways owner IAG, the BBC understands.

IAG, which also controls Iberia in Spain, has submitted a fresh bid – which could be approved next week – of around €2.50 (£1.87) per share.

The deal, which values Aer Lingus at about €1.3bn (£971m), could face political hurdles as the Irish government owns 25% of the airline.

The firm, in which Ryanair has a 29.8% stake, rejected two IAG bids last year.

By acquiring Aer Lingus, IAG would gain more take-off and landing slots at Heathrow Airport – valued at around £30m per pair – allowing it to operate more flights.

Aer Lingus is the fourth busiest operator at Heathrow behind BA, Lufthansa and Virgin Atlantic.

However, opposition Irish MPs have called on the Irish government to veto any takeover bid, which might cede control of the national carrier.

A senior government source told the BBC: “The issue of landing slots at Heathrow airport is crucial for the Irish government and was discussed at a parliamentary party meeting on Weds.

“You have to have flights from Dublin and Cork into a major hub and the Irish government would drive a hard bargain.”

After suffering badly during the global financial crash, the Irish airline’s fortunes have been improving under chief executive Christoph Mueller, who is leaving to take up the helm at struggling Malaysia Airlines.

Aer Lingus recently reported its strongest summer trading for several years, with operating profits up 19% to €112.9m (£88.5m) in the three months to 30 September.

The airline has plans to launch a new Dublin to Washington service in May, and increase services on existing transatlantic routes.

Source: http://www.bbc.com/news/business-30967346

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