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Tue 10 Feb 2015 10:44 AM

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Etihad-backed Aer Lingus shares drop over fears takeover will be rejected

Reports say Irish gov't is set to resist takeover attempt by parent company of BA, Iberia

Etihad-backed Aer Lingus shares drop over fears takeover will be rejected

Shares in Irish airline Aer Lingus dropped by ten percent after reports that the Dublin government will reject IAG’s indicative offer to buy a 25 percent stake in the carrier.

The board of Aer Lingus, in which Abu Dhabi's Etihad Airways owns a 4.1 percent stake, recommended a 1.36-billion-euro ($1.53 billion) takeover offer from International Consolidated Airlines Group (IAG), the parent company of British Airways and Spain’s Iberia.

The recommendation was issued two weeks ago and, according to a report on Bloomberg, the government is ready to reject the offer.

“A final decision has yet to be taken, according to the person, who asked not to be identified because the matter isn’t public,” Bloomberg reported.

An Irish Department of Transport official and a spokesperson for IAG declined to comment on the report.

IAG chief Willie Walsh offered assurances on maintaining Aer Lingus routes between Ireland and the UK, in a bid to overcome a growing political resistance to the proposed takeover of the airline he was CEO of until 2005. IAG has said it would not proceed without the endorsement of the government.

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