Ryanair shareholders have approved the group's proposed €1.4 billion takeover of Aer Lingus, a bid its chief executive Michael O'Leary has admitted is "highly unlikely" to succeed.
Speaking at an extraordinary general meeting in Dublin yesterday where shareholders also approved a two-for-one share split, Mr O'Leary described Aer Lingus as a "minnow of not much importance" in international terms and said he believes its best future prospects are as part of "one strong Irish airline group".
Ryanair has spent €342 million becoming Aer Lingus's second-biggest shareholder with a 25.2 per cent stake. Mr O'Leary said the group intends to retain the holding even if the bid fails.
Aer Lingus shareholders have until December 22nd, two days after the European Commission is due to rule on the proposed takeover, to approve the offer. Shareholders representing about 40 per cent of the stock have already opposed it.
Despite admitting the offer is likely to fail, Mr O'Leary yesterday urged Aer Lingus shareholders to accept what he called the "very generous" €2.80 a share offer, and questioned whether Aer Lingus's board was misleading its shareholders by saying the bid undervalues the company when eight days before the Ryanair approach, it had floated the airline at only €2.20 a share.
Dismissing the fact that his attention had been drawn away from Ryanair and towards Aer Lingus in recent weeks, he said the airline was performing strongly and reiterated the 22 per cent growth in passengers expected in the current financial year. He said yields in the fiscal third quarter will be 2-3 per cent better, while in the fourth quarter they will be down by 0- 5 per cent.
Ryanair, which is benefiting from the weaker dollar in terms of costs, has hedged 18 per cent of its fuel costs for the fourth quarter of fiscal 2008 at a 10 per cent reduction to the year-earlier period.
The shares rose 3.7 per cent to €9.95, a move brokers said may in part be linked to confirmation that the airline intends to return cash to shareholders next year.
