Aer Lingus, which has been subject to three takeover offers from Ryanair since listing in 2006, urged its shareholders to take no action for now after the €1.30 per share approach late on Tuesday.
The former Irish flagship carrier said there is “significant uncertainty” over the likelihood of the bid succeeding, given previous and ongoing competition probes.
Ryanair’s existing 29.82 per cent stake in Aer Lingus is under investigation by the UK Competition Commission, and the firm’s previous takeover attempts were stymied by European competition bodies.
And the Irish government, which owns a 25 per cent stake in Aer Lingus, also said yesterday it has concerns about the bid, which values the firm at €694m (£560.3m).
Taoiseach Enda Kenny said his government would not be forced into a fire-sale of its holding, telling the Dail: “The government would be concerned obviously in terms of competition, in terms of consumer facilities, in terms of price and access to the country.”
Ryanair has said it would like Ireland’s support, but could run Aer Lingus even if the state won’t sell out.
“In our view, the chances of this renewed bid being approved have improved, but not necessarily decisively so,” said Espirito Santo analysts.