Aer Lingus is seeking a court ruling aimed at preventing Ryanair issuing another takeover bid for it until February of next year. Aer Lingus, which says it has spent €40m defending Ryanair’s bids to date, is challenging a ruling by the Irish Takeover Panel (ITP) which meant Ryanair had only to wait 12 months after its unsuccessful August 2012 takeover bid before it could make another bid. Aer Lingus says it is it is being hampered in its commercial activities due to restrictions by such takeover attempts. Its action against the ITP began yesterday before the Commercial Court.
The airline wants Mr Justice Sean Ryan to rule no such bid could be launched before February 2014, which would be 12 months after the European Commission’s decision blocking the Ryanair bid was made. The action arises from Ryanair’s third bid in July 2012 to win control of Aer Lingus. That €694 offer was blocked last February by the European Commission which said the merger would harm consumers by creating a dominant company on 46 routes where both airlines are competing. Aer Lingus argues the ITP’s decision to allow another bid from next month is wrong in law.
The ITP acted irrationally in leaving it subject to repeated offer periods by Ryanair. The bid was done through a subsidiary Coinside Ltd, which along with Ryanair are notice parties in the case. Ryanair is Aer Lingus’s biggest shareholder with a 30 per cent stake. The Government, holder of a 25 per cent stake, also opposed Ryanair’s bid. Opening Aer Lingus’ case, Paul Sreenan SC argued the ITP fundamentally erred in its application of general principles set down by the EU Commission in relation to takeovers.
Irish law governing takeovers must be interpreted in accordance with those general principles, he said. Aer Lingus must not be hindered in its general business operations for an unreasonable period by virtue of of being subject to repeated takeover bids, counsel said. It should not be subject to “repeated sieges” such that it affects how Aer Lingus carries on its normal business operations, he said. The hearing continues.
