Aer Lingus: The madness just keeps on coming
It only took two weeks after the flotation of Aer Lingus for the first takeover bid to occur. The offer from Ryanair of 2.80 per share (after a flotation price of 2.20) has brought about a hysteria that would be laughable if it were not so sad.
The behaviour of the Government and our so called oppostion in the guise of Olivia Mitchell has been bizarre. It seems that they didn't quite understand that if you privatise a State asset that there is a reasonable chance that other people may wish to buy it. Ryanair are being demonised as the Great Satan when they, rather than undervaluing Aer Lingus as the Board of that company stated, have in fact offered a significant premium over the value the previous owners of the airline put on it. The actions of both the pilots and the unions in using pension funds to invest in the sahreas in a bid to stop this takeover makes no sense from a commercial point of view. If they had wanted to prevent a takeover they should have done so over the last couple of years - it's too late crying now. The result of what they are doing will only undermine confidence in the company and, if they are successful in gaining over 50% of the share between the Government, the ESOP, the pilots and the union, will make the airline very unattractive to any other investors. This will cause the share price to drop and, since it is pension fund money gone into this, the cries will be heard about how they must be saved from their own folly.
It should be fun to watch over the next few months.... I stand by my claim that the sale of the airline will be regretted.
The behaviour of the Government and our so called oppostion in the guise of Olivia Mitchell has been bizarre. It seems that they didn't quite understand that if you privatise a State asset that there is a reasonable chance that other people may wish to buy it. Ryanair are being demonised as the Great Satan when they, rather than undervaluing Aer Lingus as the Board of that company stated, have in fact offered a significant premium over the value the previous owners of the airline put on it. The actions of both the pilots and the unions in using pension funds to invest in the sahreas in a bid to stop this takeover makes no sense from a commercial point of view. If they had wanted to prevent a takeover they should have done so over the last couple of years - it's too late crying now. The result of what they are doing will only undermine confidence in the company and, if they are successful in gaining over 50% of the share between the Government, the ESOP, the pilots and the union, will make the airline very unattractive to any other investors. This will cause the share price to drop and, since it is pension fund money gone into this, the cries will be heard about how they must be saved from their own folly.
It should be fun to watch over the next few months.... I stand by my claim that the sale of the airline will be regretted.
posted by Diarmaid Mac Aonghusa at 23:15
2 comments
