Aer Lingus willing to recommend improved €1.36bn takeover offer from IAG

Dublin-based airline Aer Lingus has said it would be willing to recommend a sweetened €1.36bn takeover offer from IAGto its shareholders.

After two previous rejections, IAG raised its offer for Aer Lingus on Monday to €2.55 per share.

IAG had attempted to take over Ireland’s second-largest carrier last year, previously offering €2.40 and €2.30 per share.

The new offer is made up of a cash payment of €2.50 a share along with the ordinary dividend of €0.05 per share.

"Having considered this request, the board has indicated to IAG that the financial terms are at a level at which it would be willing to recommend, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties," Aer Lingus said in a statement.

If approved, Aer Lingus would continue to operate as a separate business with its own brand, management and operations, but would be part of the larger IAG group which includes British Airways and Iberia.

IAG said: “IAG believes that the proposal would secure and strengthen Aer Lingus's brand and long term future within a successful and profitable European airline group, offering significant benefits to both Aer Lingus and its customers.

“IAG recognises the importance of direct air services and air route connectivity for investment and tourism in Ireland and intends to engage with the Irish government in order to secure its support for the transaction.”

Ryanair and the Irish government, which hold stakes of 29.8% and 25.1% in Aer Lingus, respectively, would also need to vote in favour of the deal.