Ryanair to grow organically if bid is blocked

 
City A.M. Reporter
RYANAIR may mount a legal challenge if its bid to buy Irish rival Aer Lingus is blocked by the European Union but it will not pursue further acquisitions if the merger ultimately fails, its chief executive has told Rueters news agency.

Michael O’Leary is trying for the third time to buy Ireland’s once dominant airline, but the European Union says the deal may curb competition.

O’Leary said that if the effort fails, the airline will focus on growing organically and take advantage of the enormous opportunities created by the rapid deterioration in the finances of European legacy airlines like Iberia and SAS.

“If it is not approved I can always appeal to the European courts... it is one of the options that would be available to us,” O’Leary said.

“If they don’t allow this, we’ll just have to give up and grow organically,” he said. The European Commission, which is due to make a decision on whether to approve the merger early next year, this week sent Ryanair a list of objections to the tie-up. The statement was seen by some analysts as a set-back for Ryanair’s bid but O’Leary said the EU move was a procedural step which did not necessarily mean additional remedies were required.

Ryanair has already submitted a package of remedies to the commission that includes a commitment from at least two “major EU airlines” to set up bases in Dublin as part of a series of measures to allay concerns the merger would curb competition.

“There is nothing in the objections that can’t, and in our humble opinion won’t, be addressed by our remedies package,” he said, adding that he would consider additional steps if needed.

The fact that Aer Lingus’ share price is trading significantly below the bid price of 1.30 indicates that the markets is cautious on the deal, O'Leary said.