‘No certainty’ of improved IAG bid for Aer Lingus

'No certainty' of improved IAG bid for Aer LingusInternational Airlines Group says there can be “no certainty” that it will return with another offer for Aer Lingus after a second bid was rejected by the Irish flag carrier.

The revised takeover bid from the British Airways owner was made at the end of December was for €2.40 (£1.88) per share against the €2.30 offered previously.

Activist Aer Lingus investor Crystal Amber, which holds a 2.8% stake, called on IAG to raise its bid to €3 a share, valuing the carrier at €1.6 billion.

“We think the board of Aer Lingus was absolutely right to reject an offer at €2.40,” Richard Bernstein, investment adviser at Crystal Amber, told the Sunday Telegraph.

He said that the Dublin-based airline was worth a “minimum” of €2.75 a share and that IAG could be forced as high as €3.

Bernstein expects IAG to return again with a sweetened third offer.

“When [IAG boss] Willie Walsh bid for Vueling he bid €7 initially which was rejected, and then he paid €9.25 in the agreed deal so there’s a bit of a precedent,” he was quoted as saying.

Bernstein previously urged IAG to offer €2.60 a share, but said that in the light of last Thursday’s strong fourth-quarter trading update from Aer Lingus, such a bid would be “insufficient”.

The airline said operating profit for 2014 would surpass the €61.1 million it reported a year earlier and that it had boosted fuel hedging to benefit from falling fuel prices.

Revealing that its latest offer had been rejected, IAG said on Friday: “There can be no certainty that any further proposal or offer will be forthcoming. A further statement will be made if and when appropriate.”

A successful bid for Aer Lingus would see IAG gain more precious take-off and landing slots at Heathrow. But any acquisition would require the backing of Ryanair which owns 29.9% of its Irish rival, and has itself tried and failed to take it over.

The Irish government owns 25% of Aer Lingus and would also have had to agree the deal.

Sourced from Travel Weekly

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