THE saga of Michael O’Leary’s pursuit of Aer Lingus is showing no signs of coming to an end. After his surprise £595m bid for the 70 per cent of Ryanair’s Irish baby brother he doesn’t already own was blocked by the European Commission last summer, the outspoken chief executive is understandably bearing something of a grudge towards the antitrust authorities.
His latest war of words is likely to drag things out even further. Though a decision is due from the UK Competition Commission in less than six weeks, a negative outcome for Ryanair will no doubt mean a lengthy appeal – but one analysts expect to end with O’Leary giving up and offloading at least part of his stake. In the meantime investors are left with the one thing they hate most – uncertainty.
With no idea how much, if any, use the Aer Lingus stake will be to Ryanair in the long term, the ambiguity will be a drag on its share price for the forseeable future.
It’s a disappointing shift in momentum: Ryanair’s stock price has shot up more than 46 per cent since January – and won’t be helped by the fact that shareholders are already waiting with bated breath for the €500m special dividend that the airline says could come some time in the next two years.
O’Leary is no stranger to speaking out, but if he wants to keep investors onside he must urgently answer their questions.