Newspaper article International Herald Tribune

Shifting Tactics, Ryanair Offers to Shed Aer Lingus ; Effort to Mollify U.K. on Antitrust Issues Draws Questions on Motives

Newspaper article International Herald Tribune

Shifting Tactics, Ryanair Offers to Shed Aer Lingus ; Effort to Mollify U.K. on Antitrust Issues Draws Questions on Motives

Article excerpt

Ryanair said it would sell its 29 percent stake in its Irish rival to settle a dispute with British antitrust authorities, but it was unclear if the announcement was merely a tactical move.

Ryanair, the European budget airline, said Tuesday that it would be open to selling its stake in Aer Lingus amid pressure from competition regulators, a step that would end a controversial investment that started in 2006.

Ryanair said it would sell its 29 percent stake in Aer Lingus to any European company that made a successful bid for more than half of the airline. The decision comes ahead of a final report by the Competition Commission in Britain, set to be published in August, that is likely to criticize Ryanair's holding in Aer Lingus.

But some analysts said Ryanair's announcement might be no more than another tactic in its battle with the competition authorities over its investment in Aer Lingus and several failed attempts to buy the rest of the airline.

"We would be surprised if another E.U. airline takes the bait," analysts at Investec wrote in a note to investors. "It is a bold move as it assumes that no other airline will take the bait and get involved in this complicated, drawn-out merger and acquisition battle."

The step is the latest in a saga that started when Ryanair built its stake in Aer Lingus in 2006. During the last six years, Ryanair has made three unsolicited offers for Aer Lingus, in which the Irish government holds a 25 percent stake. Aer Lingus is attractive for Ryanair because of its valuable takeoff and landing slots at airports like Heathrow.

It is that major presence at Heathrow that gives the British competition regulator jurisdiction over the matter.

In February, the European Commission blocked Ryanair's latest bid for Aer Lingus, worth nearly EUR 700 million, or $925 million, after a six-month review. …

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