Aer Lingus Rejects IAG Takeover Bid

(RTTNews) - Irish airline Aer Lingus on Thursday said it has rejected a takeover offer from British Airways parent company International Consolidated Airlines Group SA (IAG.L, ICAGY.PK).

Aer Lingus, based in Dublin, said it received a preliminary, highly conditional and non-binding offer from IAG on Sunday and rejected the proposal on Tuesday, as the offer fundamentally undervalues Aer Lingus and its attractive prospects.

Following the announcement, Aer Lingus shares gained 12 percent on the London Stock Exchange.

Meanwhile, IAG said it has noted the recent movement in the share price of Aer Lingus and confirms it submitted a proposal to make an offer for the company, which has been since been rejected.

IAG said there can be no certainty that any further proposal or offer will be forthcoming.

A bid to buy Aer Lingus needs the approval of the Irish government, which has about 25 percent stake in the airline, and also of Ryanair, which has a near 30 percent stake and had made unsuccessful offers to acquire Aer Lingus.

IAG, a leading global airline group, reported revenue of 15.2 billion euros in the first nine months of 2014, up 7.4 percent from last year. Smaller airline Aer Lingus reported passenger and cargo revenue of 1.23 billion euros in its nine month period, up 9.3 percent from a year ago.

AERL.L closed Thursday at 2.04 pence, up 0.22 pence or 12.15%, on a volume of 2.6 million shares on the LSE.

IAG.L closed at 463.50 pence, up 19.90 pence or 4.49%, on a volume of 12 million shares on the LSE.