Ryanair made a last-ditch effort yesterday to persuade Aer Lingus shareholders to accept its takeover bid, repeating a call for job cuts at the airline and accusing management there of misleading investors.
The bid by Europe's biggest low-cost carrier, which values Ireland's former state airline at €1.48 billion, is expected to fail given opposition from key shareholders such as the government and Aer Lingus employees.
Ryanair chief executive officer Michael O'Leary said in a letter to Aer Lingus shareholders, who have until Friday to accept his €2.80-a-share offer, that the Aer Lingus board could not argue the bid was too low, having floated the company for less.
"The Aer Lingus board may have misled the selling shareholder and ultimately the people of Ireland by agreeing to a price of €2.20 at the IPO," he wrote in the latest move in a two-month long war of words between the two companies.
"Alternatively, they may be misleading shareholders now in recommending you reject the Ryanair offer of €2.80... If €2.80 'significantly undervalues Aer Lingus' then why did this board approve the sale of Aer Lingus' shares at €2.20 just eight days prior to the Ryanair offer?"
Aer Lingus's shares were down 1.1 per cent at €2.72 yesterday while Ryanair was 0.1 per cent lower at €9.94 in an Irish market that was up 0.2 per cent. Aer Lingus declined to comment on the letter.
Ryanair has said that if the bid fails - which even Mr O'Leary has said is likely - it will remain a long-term shareholder and may return with another offer.
Mounting expectations that Ryanair's bid for a stake of at least 50.1 per cent will fail means shares in Aer Lingus have traded at below the offer price for more than a month - although Ryanair said that also reflected investors' low expectations of how an independent Aer Lingus would perform.
"The fact that Aer Lingus' share price has continued to trade below Ryanair's €2.80 offer is, we believe, evidence of the fact that the market has little confidence in the ability of Aer Lingus to deliver a better alternative," Mr O'Leary said.
A circular from Aer Lingus earlier this month lacked concrete proposals on how current management planned to lower fairs and costs or generate significant growth, he added.
"With over four times the number of employees per passenger, Ryanair believes that Aer Lingus is overstaffed compared to Ryanair. The second circular fails to address the urgent need for a reduction in staff numbers at Aer Lingus."
In response to a request for details from Ireland's Takeover Panel, Aer Lingus said on December 1 it planned to boost revenues and cut costs significantly next year. While it identified areas where overheads could be reduced, it did not specify how or whether there would be any job cuts.