Irish Government Says IAG Offer for Aer Lingus Not Enough

LONDON--The Irish government said Tuesday that it could not back a proposed takeover of Aer Lingus Group PLC (EIL1.DB) by British Airways parent International Consolidated Airlines Group SA (IAG.LN), even after both carriers said they would support such a deal.

"The information and commitments that have been provided to date, do not at present provide a basis on which the government could give an irrevocable commitment to accept an offer to dispose of its shares," Irish Transport Minister Paschal Donohoe said.

"The minority holding which the state has in Aer Lingus would not be sold unless the market conditions were favorable, the terms of the sale were satisfactory to the government and an acceptable price could be secured," he added.

The Irish government holds a 25% stake in Aer Lingus.

Separately, IAG said it was aware of the Irish government's response and would consider it in due course.

Last month, IAG made a preliminary bid for Aer Lingus of 2.55 euros ($2.89) a share in an all-cash deal, which included a five euro cents a share dividend. Aer Lingus said it could support such a bid, pending the backing by major shareholders, including the Irish government.

Robert Wall contributed to this article.

Write to Tapan Panchal at [e-mail]

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