Aer Lingus Mulls Sweeter IAG Takeover Offer

LONDON-- Aer Lingus on Monday said it is considering a revised takeover offer by International Consolidated Airlines Group SA after rejecting two earlier bids by the British Airways parent.

London-based IAG is offering to pay EUR2.55 per Aer Lingus share, or 11% above the initial bid made in December, Aer Lingus said in a statement. The offer comprises an all-cash offer of EUR2.50 for each Aer Lingus share and a cash dividend of EUR0.05 per share.

The offer values Aer Lingus at EUR1.36 billion or around EUR100 million above the group's current market capitalization. The Irish airline's board rejected IAG's initial offer of EUR2.30 a share made in December and an increased offer this month at EUR2.40 a share as insufficient.

The IAG proposal is "conditional," Aer Lingus said. The airline noted any decision still requires board approval. Accepting the offer is also contingent on Ryanair Holdings Ltd., the budget carrier which owns almost 30% of Aer Lingus stock and the Irish government, also a major shareholder, signing off on the deal. Ryanair has tried to buy Aer Lingus in the past and failed.

IAG chief executive Willie Walsh, who previously headed the Irish Airline, is trying to strengthen the company's hold on the lucrative trans-Atlantic market. Buying Aer Lingus would give the group scarce takeoff and landing slots at London Heathrow airport, Europe's busiest hub. British Airways has about 48% market share at Heathrow.

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