The Takeover Panel has asked businessman Denis O'Brien to clarify his remarks in support of those opposing Ryanair's hostile bid for Aer Lingus when he declared his 2.1 per cent stake in the former State-controlled carrier.
The intervention from the panel, which oversees all bids on the stock market, came as Ryanair made final preparations to publish its offer document, possibly today.
Meanwhile, Deutsche Bank has warned that Ryanair is facing a €30 million "profit hit" if competition authorities decide it must give up as many as 28 flights a day. This is because Ryanair would have 28 per cent of the UK-Ireland market.
Mr O'Brien declared his intention to thwart Ryanair last Monday with a €32 million investment in Aer Lingus.
The panel is said to be examining whether his alignment with the anti-Ryanair investors raises concerns on "concert party" grounds, particularly in relation to the 28 per cent stake held by the Government.
If he and the Government were deemed to be acting in concert, they would have to mount a mandatory bid because their joint shareholding exceeds the 29.9 per cent threshold above which investors must mount a bid.
Mr O'Brien said on Monday that he favoured competition in aviation. "I am pleased to be giving my support to the staff, the pilots and the board and management of the airline," he said.
The panel is understood to have asked Mr O'Brien to explain his use of the word "support". While he did not say he was supporting the Government as 28 per cent shareholder, the board and management are in support of the Government's position.
Meanwhile, the Employee Share Ownership Trust (ESOT) is showing increasing signs that it may soon buy additional shares. It is understood moves are now in train for the Government to transfer shares to the ESOT earlier than originally planned.
The Government is holding over 2 per cent of equity on behalf of the ESOT. It was originally planned that these shares would be released to the ESOT gradually when they transferred money via a profit-sharing scheme to the Government. But it now seems likely this process will be speeded up.
If the ESOT's allocation grows, it would give the staff shareholding more leverage on its shares.
Meanwhile, Ryanair could take a "profit hit" of €35 million and have to give up 28 flights a day according to an analysis by Deutsche Bank. The German bank has put a sell recommendation on the stock.
