Ireland's Aer Lingus yesterday dismissed a €1.48bn (£990m) takeover bid from Ryanair, saying that no offer from its rival would be acceptable.
Aer Lingus's chief executive, Dermot Mannion, told journalists: "Let's be unequivocal, I cannot conceive of circumstances in which the Ryanair takeover would be approved by the Aer Lingus board."
In its defence document, Aer Lingus called the offer "derisory ... ill-conceived, contradictory and anti-competitive". It pointed out that the offer was pitched as a "substantial" discount to the stock-market values of key competitors. According to Aer Lingus, the offer valued it at 4.9 times its earnings, compared with enterprise value, while Ryanair trades at 9.7 times, easyJet at 7.5 times, Air Berlin 5.6 times, Lufthansa 5.6 times and British Airways at 5.1 times.
Mr Mannion said in the document: "Faced with a strong, well-capitalised and independent Aer Lingus, Ryanair, our principal short-haul competitor, has reacted in a hostile, anti-competitive move designed to eliminate a competitor at a derisory price."
In a letter to shareholders, John Sharman, the chairman of Aer Lingus, said: "Ryanair does not possess the appropriate experience in managing, and demonstrates a hostile attitude towards, a unionised workforce and has no experience in managing a long-haul business."
Aer Lingus shareholders have until 13 November to accept Ryanair's €2.80-a-share offer. Ryanair, which reports its half-year results on Monday, declined to comment.
Aer Lingus insisted the offer did not account for its performance or prospects. It said that, since 2001, it had grown underlying earnings by 77 per cent and reduced costs by 47 per cent.
Mr Sharman said Europe's biggest budget carrier lacked the know-how to deal with the unionised staff at Aer Lingus. Ryanair does not negotiate with unions but has said Aer Lingus, which has a strongly unionised workforce, would be able to operate as at present.
The unions of the Aer Lingus workforce, which owns more than 13 per cent of the company's shares, also put out a robust rejection of the Ryanair bid.
The Central Representative Council said: "The unknown future battles between a Ryanair-led management team and trade unions and staff are an uncertainty that this already volatile industry can do without."Reuse content