During these times of financial turmoil, there are companies searching for extra funds in order to survive where as other companies think that the merger solution in the only way out.
Today, Ryanair, one of the most successful airlines during the last 10 years, placed a fresh bid on rival Aer Lingus for €750m, or just half of what it offered two years ago in an approach thwarted by European regulators.
Today's bid, though, represents part of the recent spate of airline mergers, which means that there is greater probability of success. Ryanair, who already owns 29.82% of Aer Lingus, proposed a all-cash offer at €1.40 per share, representing a 28% premium over the avergae price fo Aer Lingus shaeres during the last month.
Since the announcement, Aer Lingus shares were trading 14.3% higher, where as Ryanair's shares were just 2% lower, trading at €2.87. Ryanair's CEO, Michael O'Leary, said that the economic and regulatory scenarion had changed completely since the Ryanair's last move on the Dublin based airline.
As it was precised in the offer document, Ryanair's intentions over the next five years are to double the size of the company creating as a consequence more than 1000 new jobs. Apart cost savings and increased efficiency, Ryanair's detailed intentions represent one of the major issues why the two companies should merger. At this point, the remaining unknown factor is whether financial regulators and shareholder will accept this offer or not.
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