The 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…