The Irish government has rebuffed a £1 billion bid from Ryanair for former state airline Aer Lingus, but the budget airline may succeed in taking a majority stake.
Ryanair announced on Thursday it had bought a 16% share in its Irish rival, following the partial launch of Aer Lingus on the Dublin and London stock markets this week.
Chief executive Michael O’Leary said the aim was to create an Irish airline group to rival others in Europe and Aer Lingus would be retained as a separate brand operating profitable long-haul services.
The offer of €2.80 per share compares with an initial trading price of €2.20. However, the extent of the shareholding on offer in Aer Lingus is unclear.
The Irish government had an 85% stake, with the remainder owned by employees. Just under 52% of shares were expected to be sold initially on the markets, meaning Ryanair may need to acquire every available share to succeed. But the government has also said it will reduce its holding to 25%.
In a statement, the Irish government insisted it “will not sell its shares in Aer Lingus”.