O’Brien wades in
Tuesday, October 17th, 2006The news is just circulating that Denis O’Brien has waded into the Aer Lingus / Ryanair debacle, buying over 2% in the ex-State airline.
A statement from the businessman says he did so as he believed in competition, but his not-so-secret dislike for Michael O’Leary may well have something to do with it. Either way, with the shares close to the €3 mark, up 70c on their floatation price, you would have a hard time putting this off as a short-term investment.
So the whole game now stands as follows. 2.1% gone to Denis O’Brien, the pilot’s shares now up to 2.24%, the Government retains its 28.3% and the Employee Share Ownership Trust (ESOT) holds around 11.8%. Ryanair currently holds 19.2% and is currently unable to purchase stock unless the share price drops to €2.80 or it revises it’s offer. That means the anti-Ryanair block holds 44.4% (approx.) of the company, with the rest (minus the 19% owned by Ryanair) being ‘free-floating’ stock. This means that the anti-Ryanair block only need to secure another 5-6% to lock O’Leary out of his bid, while O’Leary and Co. need to snap up another 31% or so to get a controlling interest.
The longer the price remains high, the more time the Government and Aer Lingus workers have to lock the bid out…
But you do have to wonder, was this O’Leary’s plan all along? The Government is in a frenzy, the workers are going mad and there’s talk of using their pension fund to save the airline from Ryanair… even if it wasn’t intentional, O’Leary has caused much mischief, and given that he bought 16% of the company at €2.20, he could stand to make a tidy profit if he quietly backs out of the battle…
Blogs elsewhere
October 17th, 2006 at 9:33 pm
I loved how the tax exile talked about his love for the national interest. Declare your taxes here then.
October 18th, 2006 at 10:17 am
Damian nail on the head
October 18th, 2006 at 1:54 pm
It seems pathetic watching the old school running around like headless chickens…. It seems the only Figurehead the Government could pursuade to ‘invest’ in AerLingus is one of the brown envelope boys who can’t be arsed to pay Irish tax!!
Do all these people really think O’Leary wants to buy the airline? They should wise up and realise that he wants to make money… and no matter how the shares fall at this stage he’s going to profit big time from the situation. It was as easy as taking candy from children.
October 18th, 2006 at 10:29 pm
Have to agree with you Adam.
O’Leary’s strategy means he can’t really lose.
November 18th, 2006 at 10:06 pm
[…] Just like Ryanair’s bid for Aer Lingus, most people seem to have been taken by surprise by the bid, however in hindsight it’s something people really should have expected. With all the talk of an ITV/NTL UK merger, and the media giant that would create, it seems silly to think that BSkyB would have sat back and allowed a serious contender to emerge without doing something to thwart it’s progress. […]