So, after all the speculation, now we know. Having originally made an offer of €2.30 per share to the Aer Lingus board, IAG returned with a second offer of €2.40 on December 29th, which was also rejected. However, the game is still on as contacts are believed to be continuing between the two sides and it would be a surprise if Willie Walsh does not have one final run.

IAG’s challenge is that it faces three groups of investors . The first is the financial investors for whom price is everything . The second is Michael O’Leary’s Ryanair, which owns just under 30 per cent and will have a mix of strategic and financial motivations. And the third is the Government, which will be much more concerned with the strategic implications for Ireland’s airline connectivity than with cash. Part of the motivation for yesterday’s late statement to the stock exchange was, no doubt, that various financial investors were talking up the price that would be needed for IAG to succeed. The IAG statement should bring expectations down a bit. The original pre Christmas offer of €2.30 was 10 cent higher than originally reported. The subsequent offer, also rejected, was only a bit higher at €2.40, below the €2.50 at which the shares closed yesterday.

It is an open question as to how high IAG might go, assuming they do return. However a €2.50 to €2.60 range looks more likely than the speculation on Friday which was heading up towards €3. This is well above the Aer Lingus share trading range and so might well attract some of the financial investors to sell.

For the Government, the big question is connectivity and fears that a sale might lead to some of the prized Heathrow slots being reallocated away from Irish routes, money will not be prime consideration.