From memory, the dividends received by the councils over the years have been very low from an asset of this worth. The focus should be on increasing dividends not spending time raising external funding from
equity and bank funders for an acquisition that has been competitively priced (i.e. it's not an offmarket, low price deal).
I cannot imagine them achieving shareholder support where there to be an increased risk of reduced dividends. Whether the population of Greater Manchester supports the acquisition or not is irrelevant IMO for as long as they are not subsidising MAG, but where MAG are effectively reducing council tax/subsidising other capital projects in the Manchester area.
As for the strategic standpoint, I've no idea how it will play out. Surely the increase in competition in the South East will be good for the London passenger? The bargaining power may help bring more airlines and routes into Manchester eventually. Who knows?