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Old 6th Jul 2010, 11:02
  #1538 (permalink)  
davidjohnson6
 
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There is an argument to say that given that the court has decided that it does not have authority to order Ryanair to sell its stake in Aer Lingus as the stake is considered only a minority shareholding, that Ryanair may well decide to hang on to those shares so as to substanstially weaken one of its main rivals.

With the Govt's 25% and the staff 12.5% of the shares, Ryanair's 30% stake means that any other commercial company would be loath to get involved in Aer Lingus - there are just too many interested parties with very sizeable stakes to push anything through. Whether the Govt would consider selling most of its stake in a year or two's time, I don't know

Thus, if Ryanair holds onto the Aer Lingus stake, and doesn't need the money for any other purpose (and Ryanair shareholders seem remarkably docile on this), then this will end up just grinding Aer Lingus down. While not impossible, it makes consolidation with any other large airline group (e.g. AF-KL) less likely, and the general sense of fear, uncertainty and doubt over Aer Lingus' future may well dissuade other parties from getting involved. Would you buy shares in a company where the board is not the master of its own destiny ?

Essentially, Ryanair keeping its 30% equity stake means that Aer Lingus is put into a limbo like state. Manageable for a while, but long term can only lead to decline.
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