July 6, 2010 6:17 PM
No Deal: Ryanair Loses Appeal But Can Keep Its Share in Aer Lingus
Posted by D.M. Levine
Update, 7/8/10 at 6:15 pm - The name of Covington & Burling partner Georg Berrisch, who was part of the team representing Ryanair on the matter, has been added to the second paragraph below.
A European Union appeals court has affirmed a 2007 decision by E.U. regulators rejecting Ryanair’s $1.86 billion hostile bid for rival Irish carrier Aer Lingus. But the court declined to force Ryanair to shed its current 29.8 percent minority stake in Aer Lingus, according to Bloomberg.
Alec Burnside of Linklaters represented Aer Lingus before the E.U. appeals court, as the firm had before the European Commission. Alan McCarthy and Vincent Power of A&L Goodbody and Georg Berrisch and David Hull of Covington & Burling represented Ryanair in its appeal, as did John Swift QC of Monckton Chambers.
The European Commission blocked the proposed takeover three years ago--a rare move, according to Forbes--holding that if Ryanair were to merge with Aer Lingus, the new company would enjoy a monopoly on flights out of Dublin. Ryanair appealed that decision to the E.U.'s General Court, while Aer Lingus sought to force Ryanair to sell its Aer Lingus stake. In light of the court's ruling that Ryanair can hold on to its shares, Aer Lingus says that it's considering an appeal to the E.U.'s highest court, Forbes reports.
While the General Court affirmed the ban on the current bid, the ruling doesn't bar Ryanair from making future offers for Aer Lingus--although any such bid would have to work around the court's ruling, according to Bloomberg. According to Forbes, Ryanair CEO Michael O'Leary reportedly has said that he continues to believe that Aer Lingus's future viability rests in being part of a larger Irish airline group.
In a statement posted on its Web site, Ryanair said it "welcomed the E.U. court's confirmation of the European Commission's 2007 decision that it cannot force Ryanair to sell its shareholding in Aer Lingus."
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