IAG will never get it over the line even with a higher bid, EY and the Gov make up 30% so if FR backed them they will still find it dofficult to secure the other shareholders which all only have tiny shares. The fourth biggest holder (2.1%) said they would consider if an extra 35c per share was added.
Never say never. If FR has to sell, it might as well be to IAG, and get a good price. The BA/FR businesses hardly overlap, maybe on a handful of city-pairs but no airport-pairs.
EY could only ever own 49% of EI, so much depends on the Irish government's attitude, and there would undoubtly be some "red lines". Does it need the dosh? Would it prefer "the devil you know" to "who knows"?