THE PHOENIX
AER LINGUS SHOWERS SUITS WITH EURO 16.2 Million Euro
While Dermot Mannion, Aer Lingus chief executive, is still hell bent on cost savings in the airline, surely the most startling figure in the 2006 results was the
Euro 16.2m paid out defending the Ryanair hostile approach. This is a figure which beggars belief but no doubt the champagne corks were popping in certain offices in Dublin 2.
The Aer Lingus defence called for a response document and some common sense. That this exercise resulted in a 16.2m hole in the Aer Lingus accounts will not impress shareholders,
especially since the document was found to be flawed by the Irish Takeover Panel, necessitating the issuing of a clarification on November 24.
So who are the masters of the universe who shared out the 16.2m just in time for Christmas?
The bulk of the lolly would have been split between the frontline advisers assembled by a
panicked Aer Lingus board.
When Michael O'Leary's intentions became clear, Mannion called in
Roy Barrett and Finbarr Griffin of Goodbody. Griffin had held the lead role for the stockbrokers in
advising the Government on the floatation earlier in the year and presumably had something to say about the low price, which prompted O'Leary to start building his stake.
Also brought back to the feeding trough was
Goldman Sachs International who had been
paid millions by Aer Lingus itself on the floatation this time represented by
Phil Reaper and Nicholas van den Arend, while
Basil Geoghegan also joined in having advised Aer Lingus on the floatation.
And there was room for
Merrion Capital's chief executive John Conroy to throw in his tuppenceworth. The stockbroking arm of the group Merrion Stockbrokers had
previously acted for Aer Lingus during the floatation and
Dan Ennis, who had been involved then, was called back in to help mount the defence.
These boys shared out the bulk of the fees while others who also got slices of the Aer Lingus action included
K Capital Source (Mark Kenny and Jonathan Neilan) which dealt mainly with investor relations and
Drury Communications (Billy Murphy and Padraig McKeon) and Powerscourt (Rory Godson) who handled
PR, along with Aer Lingus's inhouse
PR officer, Cillian Cullhane.
The legal advice came courtesy of
Arthur Cox.
It will be interesting to see how the 16.2m compares with Ryanair's fees for its takeover attempt.
O'Leary was advised by a significantly smaller team made up of Davy Corporate Finance (Hugh McCutcheon and u.Ugende Mulhem) and Morgan Stanley (Gavan MacDonald, Colm Conlon and Adrian Doyle) while the
PR spin was provided by Jim Milton and Pauline McAlester of Murray Consultants and legal advice by A&L Goodbody.
Dermot Mannion has been boasting about his 'Programme for Continuous Improvement' a euphemism for
staff cutbacks and
pay freezes.
It is ironic therefore that the Ryanair bid has effectively foundered not because of assorted Armani suited advisers but because O'Leary couldn't get his hands on the stake held by the under pressure and increasingly discontented ordinary staff through the Employee Share Ownership Trust.