British Airways owner International Airlines Group revealed Thursday that it had made a takeover approach for Aer Lingus, but added that the Irish carrier had rejected its proposal.
"International Consolidated Airlines Group notes the recent movement in the share price of Aer Lingus and confirms it submitted a proposal to make an offer for the company, which has been rejected by the board of Aer Lingus," said a brief statement from IAG, which also owns Spain's Iberia.
"There can be no certainty that any further proposal or offer will be forthcoming," the group added without giving any indication of a possible price.
"A further statement will be made if and when appropriate."
In a separate statement, Aer Lingus confirmed it had rejected the approach.
"The board confirms that on 14 December 2014 it received a preliminary, highly conditional and non-binding approach from IAG," the carrier said.
"The board has reviewed the proposal and believes that it fundamentally undervalues Aer Lingus and its attractive prospects. Accordingly, the proposal was rejected on 16 December 2014."
Aer Lingus also said it "strongly urged" shareholders to take no action.
In reaction to Thursday's surprise announcement, Aer Lingus shares soared by more than seven percent on the Irish Stock Exchange.
Irish low-cost rival Ryanair is the biggest single shareholder in Aer Lingus and has made three failed attempts to buy the airline since 2007.
In early 2013, the European Commission barred Ryanair's third attempt to take over Aer Lingus, citing concerns that the interests of passengers would be badly affected.
Ryanair still owns 29.8 percent of Aer Lingus, while the Irish state owns 25.1 percent.
British authorities had ordered Ryanair last year to slash its holding to 5.0 percent on grounds of unfair competition, but the group is appealing the ruling.
Dublin-based Aer Lingus operates a fleet of 47 Airbus aircraft and carries more than 10.6 million passengers per year.
IAG's current chief executive, Willie Walsh, was boss of Aer Lingus between 2001 and 2005, before he took the reins at British Airways.
BA and Iberia subsequently merged in 2011 in a tie-up aimed at slashing costs, amid a fierce economic downturn that boosted demand for low-cost competitors and sparked steep losses for traditional carriers.
AFP
Fri Dec 19 2014
British Airways owner International Airlines Group revealed Thursday that it had made an informal takeover approach for Aer Lingus, but added that the Irish carrier had rejected its proposal. - File Photo
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