The Board of Aer Lingus Group plc has repeated its message to shareholders to reject the Ryanair Offer, saying: “No new information has been provided by Ryanair in relation to the Offer since the Board last wrote to shareholders on 31 July 2012. Based on careful consideration of the issues, and extensive legal and financial advice, the Board remains of the view that Ryanair’s Offer is not in the interests of shareholders, fundamentally undervalues the business and, due to the scale and extent of competition issues, is likely once more to be prohibited by the European Commission. Accordingly, the Board unanimously recommends shareholders take no action in relation to the Offer and should not sign any document sent by Ryanair or its advisers.”
The Board wrote to shareholders on 31st July 2012 outlining its reasons for recommending that shareholders reject Ryanair’s Offer to purchase the whole of the issued and to be issued ordinary share capital of Aer Lingus not already owned by Ryanair. It now says: “Since the issuance of this circular, no new information has been provided by Ryanair in relation to the Offer and the Board re-affirms its recommendation that shareholders should reject the Offer.
“Aer Lingus is a strong and profitable airline with a proven business model; a strong balance sheet; and an internationally recognised and valued brand. The Board’s unanimous view is that Ryanair’s Offer to acquire control of Aer Lingus for €1.30 per share fundamentally undervalues Aer Lingus and represents a significant discount to the intrinsic value of the business. The Offer of €1.30 per share represents:
- A discount of 34% to Aer Lingus’s gross cash per share of €1.96 (total €1,049.9 million)
- The gross cash on Aer Lingus’s balance sheet more than pays for Ryanair’s Offer
- A discount of 12% to Aer Lingus’s Net Asset Value per share of €1.48 based on the NAV shown in the 30 June 2012 balance sheet
- This NAV does not attribute any value to either our attractive slot portfolio or brand
- A 2011 adjusted EV / EBITDAR multiple of 4.2x, a 30% discount to the average trading multiple of Aer Lingus’s traded peers of 6.0x
“Aer Lingus delivered a €130 million turnaround in operating performance between 2009 and 2011. The Group continues to make strategic, operating and financial progress. Such progress is reflected in the 2012 first half results released on 31 July 2012. On that date, Aer Lingus stated that, if current trading conditions continue, operating profit, before net exceptional items, for 2012 will be at least that achieved in 2011 (€49.1 million).”
