Aer Lingus
Ryanair Holdings PLC
05 October 2006
Not for release, publication or distribution, in whole or in part, in or into or
from Australia, Canada, Japan, South Africa or the United States or any other
jurisdiction where it would be unlawful to do so
RYANAIR ADVISES THAT IT HAS ACQUIRED A 16% STAKE IN AER LINGUS AND ANNOUNCES AN
ALL-CASH OFFER OF €2.80 PER SHARE VALUING AER LINGUS AT €1.481BN
The board of Ryanair Holdings plc today (5th October 2006) advises that it has
acquired over 16% of the issued share capital of Aer Lingus Group plc. Ryanair
now announces its intention to make an all cash offer of €2.80 per share for the
issued share capital of Aer Lingus not already in the ownership of Ryanair. This
offer is conditional on, among other things, obtaining at least a majority of
the shares in Aer Lingus. This cash offer values Aer Lingus at approximately
€1.481bn and represents a premium of 27% (approximately) over last week's IPO
share price of €2.20 per share and a premium of 12% (approximately) over last
evening's closing price for Aer Lingus shares of €2.51.
The share price appreciation since the Aer Lingus IPO occurred during the same
short period in which Ryanair acquired over 16% of Aer Lingus shares at an
average price of €2.42 per share. During the 2nd and 3rd of October - the two
days during which Ryanair was not actively buying Aer Lingus shares - the share
price fell back from €2.48 to €2.41.
Speaking at the launch of the offer this morning, Ryanair's CEO, Michael
O'Leary, said:
'This offer represents a unique opportunity to form one strong airline
group for Ireland and for European consumers. We will expand, enhance
and upgrade the Aer Lingus operations. This offer - if successful -
means both companies will continue to operate separately and compete
vigorously in the small number of routes on which we both operate -
currently around 17 of the approximately 500 routes operated by the two
airlines. We believe the price of €2.80 to be an excellent offer. If
accepted the Irish Government will realise over €500m from the sale of
their Aer Lingus shares, and the employees will realise over €220m which
equates to an average of over €60,000 per employee.'
The combined strength of Ryanair and Aer Lingus would establish an Irish airline
group with over 50m passengers annually, capable of competing on the European
and World stage against other large European airline groups, including Lufthansa
/SAS/Swiss (75m passengers), Air France/KLM (70m passengers) and BA/Iberia (63m
passengers). As the European airline industry consolidates, this acquisition, if
it proceeds, will largely replicate previous consolidations in, for example,
France (Air France/Brit Air/Regionale/KLM), UK (BA/B.Cal/DanAir/City Express),
Germany (Lufthansa/Eurowings/Lufthansa Cityline/Swiss) and Scandinavia (SAS/
Braethens).
There are benefits of combining these two Irish and European airlines into one
group. To give a flavour of what this offer - if successful - might mean to Aer
Lingus, its stakeholders and the people of Ireland and Europe, Ryanair intends
to:-
•Reduce Aer Lingus' average short haul fare (€87.55 in 2005) by 2 1/2% a
year for a minimum period of four years;
•Reduce Aer Lingus' fuel surcharges as the price of oil falls from recent
highs;
•Retain the Aer Lingus brand;
•Retain the Heathrow slots;
•Retain all profitable routes currently operated by Aer Lingus;
•Reduce Aer Lingus' costs through improved efficiencies and Ryanair's
superior purchasing power;
•Give Aer Lingus access to the benefit of Ryanair's lower cost aircraft
deliveries and lower cost financing facilities;
•Upgrade Aer Lingus' transatlantic fleet and improve its long haul
product;
•Maintain Aer Lingus as a stand alone, separate company within one strong
Irish airline group under common ownership but run as separate competing
airlines.
As the above benefits demonstrate, the Board of Ryanair intends to deliver a
publicly owned, Irish managed and headquartered airline group with the necessary
ambition, expertise, financial strength and cost base to take on European and
Global competitors well into the future. As an island nation, Ireland is
critically dependant upon strong and secure low fare airline services in order
to sustain and develop tourism and economic growth. Investing in Aer Lingus is
attractive for Ryanair and its shareholders because, amongst other things, Aer
Lingus' earnings yield is superior to the returns currently available on
Ryanair's cash deposits. Ryanair believes that there will be opportunities (by
combining the purchasing power of Ryanair and Aer Lingus) to reduce operating
costs, to increase efficiencies and to pass on these savings in the form of low
fares to the travelling public.
Ryanair has grown to be Europe's largest low fares airline by continuously
lowering prices and funding these reductions through cost savings and
efficiencies. We believe there is an opportunity to apply this successful low
fares formula to Aer Lingus where currently, in its short haul operation, fares
and costs remain far too high. We would also expect to work closely with Aer
Lingus, if the offer is successful, to improve its long haul operations where we
believe there is room to upgrade the long haul fleet and improve this product
which has not kept pace with the competition in recent years. Since we envisage
that the two companies would be run separately, in the event that this offer is
successful, nothing in this transaction will deflect Ryanair from continuing to
focus on its own pan-European expansion or from continuing to deliver unit cost
reductions and continuing to offer lower fares to millions of Ryanair's European
passengers.
There are numerous precedents across Europe (for example, in the UK, France,
Spain, Germany and Scandinavia) for two airlines of similar nationality coming
together to form a stronger, more widely diversified airline group. The European
Union has recognised the value of competitive European airline consolidation
because of the benefits which it brings to consumers. This offer, if successful,
will result in that precedent being largely replicated here in Ireland and
elsewhere, with the added benefit that customers of Aer Lingus will enjoy lower
fares in the short haul market, a better product and service in the long haul
market by reducing fuel surcharges as oil prices fall, as Ryanair applies its
philosophy of lower costs and lower fares to Aer Lingus' existing business.
In accordance with the strict rules which apply to takeovers, Ryanair is limited
in its ability to answer questions in relation to this offer.
This release should be read in conjunction with the full text of the rule 2.5
announcement issued today.
The directors of Ryanair accept responsibility for the information contained in
this announcement other than that relating to Aer Lingus, the Aer Lingus Group,
the directors of Aer Lingus and persons connected with them. To the best of the
knowledge and belief of the directors of Ryanair (who have taken all reasonable
care to ensure that such is the case), the information contained in this
announcement for which they respectively accept responsibility is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements' concerning the
Cash Offer, Ryanair, and Aer Lingus. Generally, the words 'will', 'may',
'should', 'could', 'would', 'can', 'continue', 'opportunity', 'believes',
'expects', 'intends', 'anticipates', 'estimates' or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. Ryanair assumes no obligation in respect of, nor
intends to update these forward-looking statements, except as required pursuant
to applicable law.
Any person who is the holder of 1 per cent. or more of any class of shares in
Aer Lingus or Ryanair may be required to make disclosures pursuant to Rule 8.3
of the Irish Takeover Panel Act, 1997, Takeover Rules 2001 to 2005, as applied,
with amendments by the European Communities (Takeover Bids (Directive 2004/25/
EC)) Regulations 2006.
Davy Corporate Finance, which is regulated in Ireland by the Financial
Regulator, is acting for Ryanair and no one else in connection with the Offer,
and will not be responsible to anyone other than Ryanair for providing the
protections afforded to clients of Davy Corporate Finance nor for providing
advice in relation to the Offer, the contents of this document or any
transaction or arrangement referred to in this announcement.
Morgan Stanley & Co. Limited is acting exclusively for Ryanair and no one else
in connection with the Offer and will not be responsible to anyone other than
Ryanair for providing the protections afforded to clients of Morgan Stanley &
Co. Limited nor for providing advice in relation to the Offer, the contents of
this document or any transaction or arrangement referred to in this
announcement.
Enquiries:
Ryanair Tel: +353 1 812 1212
Howard Millar
Michael Cawley
Davy Corporate Finance Tel: +353 1 679 6363
(Financial Adviser to Ryanair)
Hugh McCutcheon
Eugenee Mulhern
Morgan Stanley & Co. Limited Tel: +44 20 74255000
(Financial Adviser to Ryanair)
Gavan MacDonald
Colm Donlon
Adrian Doyle
Murray Consultants Tel: +353 1 498 0300
(Public Relations Advisors to Ryanair)
Jim Milton Tel: +353 86 255 8400
Pauline McAlester Tel: + 353 87 255 8300
Mark Brennock Tel: +353 87 233 5923
5 October, 2006
For Immediate Release
Not for release, publication or distribution, in whole or in part, in or into or
from Australia, Canada, Japan, South Africa or the United States or any other
jurisdiction where it would be unlawful to do so
Cash Offer
by
Davy Corporate Finance and Morgan Stanley
on behalf of
Ryanair Holdings plc
for
Aer Lingus Group plc
Summary
The board of Ryanair advises that it has acquired through a wholly owned
subsidiary, Coinside Limited, 84,775,000 Aer Lingus Shares representing
approximately 16 per cent. of the Issued Share Capital of Aer Lingus. The board
of Ryanair now announces its intention to make a Cash Offer of €2.80 per Aer
Lingus Share for the issued and to be issued share capital of Aer Lingus not
already in the beneficial ownership or control of the Ryanair Group. This Cash
Offer is conditional on, amongst other things, obtaining at least a majority of
the Aer Lingus Shares.
The board of Ryanair believes the Cash Offer represents an excellent price for
Aer Lingus Shares given that only 8 days ago the Government of Ireland, Aer
Lingus and their respective advisers determined that €2.20 was an appropriate
price at which to issue and sell Aer Lingus Shares pursuant to the IPO.
The Cash Offer values each Aer Lingus Share at €2.80 and values the entire
issued and to be issued ordinary share capital of Aer Lingus at approximately
€1.481bn. It represents:
•a premium of approximately 27 per cent. over the IPO Price of an Aer
Lingus Share of €2.20 per share; and
•a premium of approximately 12 per cent. over the Closing Price of an Aer
Lingus Share on 4 October 2006, the last day prior to this announcement, of
€2.51.
In addition, the board of Ryanair notes that the Aer Lingus Share price
appreciation since the IPO occurred during the same short period in which
Ryanair acquired approximately 16 per cent. of Aer Lingus Shares at an average
price of €2.42 per Aer Lingus Share which further emphasises the attractiveness
of the Cash Offer. On 2 October and 3 October, days during which Ryanair was not
actively buying Aer Lingus Shares, the price per Aer Lingus Share fell back from
€2.48 to €2.41.
The Cash Offer, which will be made by Davy Corporate Finance and Morgan Stanley
on behalf of Ryanair (or a wholly owned subsidiary of Ryanair), will be subject
to certain conditions set out in Appendix I, including amongst other conditions,
the acceptance by Aer Lingus Shareholders holding not less than 90 per cent. of
the issued and to be issued share capital of Aer Lingus (or such lower
percentage as Ryanair may determine, subject always to the Takeover Rules) and
the passing of the Ryanair Shareholder Resolutions at an EGM to be held as soon
as practicable to approve the Cash Offer. In the event that the Offer is
declared unconditional in all respects, Aer Lingus Shareholders who have not
accepted the Offer may experience a reduction in the liquidity of their Aer
Lingus Shares.
Commenting on the Offer, Mr Michael O'Leary, Chief Executive of Ryanair said:
'This Offer represents a unique opportunity to form one strong airline group for
Ireland and for European consumers. We will expand, enhance and upgrade the Aer
Lingus operations. This offer - if successful - means both companies will
continue to operate separately and compete vigorously on the small number of
routes on which we both operate - currently around 17 of the 500 or so routes
operated by the two airlines. We believe the price of €2.80 to be an excellent
offer. If accepted the Irish Government will realise over €500m from the sale of
their Aer Lingus shares, and the employees will realise over €220m which equates
to an average of over €60,000 per employee.'
The combined strength of Ryanair and Aer Lingus would establish an Irish airline
group with over 50m passengers annually, capable of competing on the European
and World stage against other large European airline groups, including Lufthansa
/SAS/Swiss (75m passengers), Air France/KLM (70m passengers) and BA/Iberia (63m
passengers). As the European airline industry consolidates, this acquisition, if
it proceeds, will replicate previous consolidations in France (Air France/Brit
Air/Regionale/KLM), UK (BA/B.Cal/DanAir/City Express), Germany (Lufthansa/
Eurowings/Lufthansa Cityline/Swiss) and Scandinavia (SAS/Braethens).
The board of Ryanair believes there are benefits of combining these two Irish
and European airlines into one group, and to give a flavour of what this offer -
if successful - might mean to Aer Lingus, its stakeholders and the people of
Ireland and Europe, Ryanair intends to:-
•Reduce Aer Lingus' average short haul fare (€87.55 in 2005 (source : IPO
Prospectus)) by
2 1/2% a year for a minimum period of four years;
•Reduce Aer Lingus' fuel surcharges as the price of oil falls from recent
highs;
•Retain the Aer Lingus brand;
•Retain the Heathrow slots;
•Retain all profitable routes currently operated by Aer Lingus;
•Reduce Aer Lingus' costs through improved efficiencies and Ryanair's
superior purchasing power;
•Give Aer Lingus access to the benefit of Ryanair's lower cost aircraft
deliveries and lower cost financing facilities;
•Upgrade Aer Lingus' transatlantic fleet and improve its long haul
product;
•Maintain Aer Lingus as a stand alone, separate company within one strong
Irish airline group under common ownership but run as separate competing
airlines.
As the above benefits demonstrate, the board of Ryanair intends to deliver a
publicly owned, Irish managed and headquartered airline group with the necessary
ambition, expertise, financial strength and cost base to take on European and
Global competitors well into the future. As an island nation, Ireland is
critically dependent upon strong and secure low fare airline services in order
to sustain and develop tourism and economic growth. Investing in Aer Lingus is
attractive for Ryanair and its shareholders because, amongst other things, Aer
Lingus' earnings yield is superior to the returns currently available on
Ryanair's cash deposits. The board of Ryanair believes that there will be
opportunities (by combining the purchasing power of Ryanair and Aer Lingus) to
reduce operating costs, to increase efficiencies and to pass on these savings in
the form of low fares to the travelling public.
Ryanair has grown to be Europe's largest low fares airline by continuously
lowering prices and funding these reductions through cost savings and
efficiencies. The board of Ryanair believes there is an opportunity to apply
this successful low fares formula to Aer Lingus where currently, in its short
haul operation, fares and costs remain far too high. Ryanair would also expect
to work closely with Aer Lingus, if the offer is successful, to improve its long
haul operations where the board of Ryanair believes there is room to upgrade the
long haul fleet and improve this product which has not kept pace with the
competition in recent years. Since the board of Ryanair envisages that the two
companies would be run separately, in the event that the Offer is successful,
nothing in this transaction will deflect Ryanair from continuing to focus on its
own pan-European expansion or from continuing to deliver unit cost reductions
and continuing to offer lower fares to millions of Ryanair's European
passengers.
There are numerous precedents across Europe (in the UK, France, Spain, Germany
and Scandinavia) for two airlines of similar nationality coming together to form
a stronger, more widely diversified airline group. The European Union has
recognised the value of competitive European airline consolidation because of
the benefits which it brings to consumers. Ryanair believes this Offer, if
successful, will result in that precedent being replicated here in Ireland and
elsewhere, with the added benefit that customers of Aer Lingus will enjoy lower
fares in the short haul market, a better product and service in the long haul
market by reducing fuel surcharges as oil prices fall, as Ryanair applies its
philosophy of lower costs and lower fares to Aer Lingus' existing business.
This summary should be read in conjunction with the full text of the following
announcement.
Enquiries:
Ryanair Telephone: +353 1 812 1212
Howard Millar
Michael Cawley
Davy Corporate Finance Telephone: +353 1 679 6363
(Financial Adviser to Ryanair)
Hugh McCutcheon
Eugenee Mulhern
Morgan Stanley Telephone: +44 20 74255000
(Financial Adviser to Ryanair)
Gavan MacDonald
Colm Donlon
Adrian Doyle
Murray Consultants Telephone: +353 1 498 0300
(Public Relations Advisers to Ryanair) Telephone: +353 86 255 8400
Jim Milton
Pauline McAlester Telephone: +353 87 255 8300
Mark Brennock Telephone: +353 87 233 5923
Davy Corporate Finance, which is regulated in Ireland by the Financial
Regulator, is acting exclusively for Ryanair and no one else in connection with
the Offer and will not be responsible to anyone other than Ryanair for providing
the protections afforded to clients of Davy Corporate Finance nor for providing
advice in relation to the Offer, the contents of this document or any
transaction or arrangement referred to in this announcement.
Morgan Stanley is acting exclusively for Ryanair and no one else in connection
with the Offer and will not be responsible to anyone other than Ryanair for
providing the protections afforded to clients of Morgan Stanley nor for
providing advice in relation to the Offer, the contents of this document or any
transaction or arrangement referred to in this announcement.
The availability of the Offer to persons outside Ireland may be affected by the
laws of the relevant jurisdiction. Such persons should inform themselves about
and observe any applicable requirements. The Offer will not be made, directly or
indirectly, in or into Australia, Canada, Japan, South Africa, the United States
or any other jurisdiction where it would be unlawful to do so, or by use of the
mails, or by any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce, or by any
facility of a national securities exchange of any jurisdiction where it would be
unlawful to do so, and the Offer will not be capable of acceptance by any such
means, instrumentality or facility from or within Australia, Canada, Japan,
South Africa, the United States or any other jurisdiction where it would be
unlawful to do so. Accordingly, copies of this announcement and all other
documents relating to the Offer are not being, and must not be, mailed or
otherwise forwarded, distributed or sent in, into or from Australia, Canada,
Japan, South Africa, the United States or any other jurisdiction where it would
be unlawful to do so. Persons receiving such documents (including, without
limitation, nominees, trustees and custodians) should observe these
restrictions. Failure to do so may invalidate any related purported acceptance
of the Offer. Notwithstanding the foregoing restrictions, Ryanair reserves the
right to permit the Offer to be accepted if, in its sole discretion, it is
satisfied that the transaction in question is exempt from or not subject to the
legislation or regulation giving rise to the restrictions in question.
Appendix I of the attached announcement sets out the conditions and principal
further terms of the Cash Offer. Appendix II of the attached announcement
contains source notes relating to certain information contained in this
announcement. Certain terms used in this announcement are defined in Appendix
III of the attached announcement.
The directors of Ryanair accept responsibility for the information contained in
this announcement other than that relating to Aer Lingus, the Aer Lingus Group,
the directors of Aer Lingus and persons connected with them. To the best of the
knowledge and belief of the directors of Ryanair (who have taken all reasonable
care to ensure that such is the case), the information contained in this
announcement for which they respectively accept responsibility is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
This announcement does not constitute an offer to sell or an invitation to
purchase or the solicitation of an offer to subscribe for any securities. Any
response in relation to the Offer should only be made on the basis of the
information contained in the Offer Document or any document by which the Offer
is made.
This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements' concerning the
Cash Offer, Ryanair, and Aer Lingus. Generally, the words 'will', 'may',
'should', 'could', 'would', 'can', 'continue', 'opportunity', 'believes',
'expects', 'intends', 'anticipates', 'estimates' or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. Ryanair assumes no obligation in respect of, nor
intends to update these forward-looking statements, except as required pursuant
to applicable law.
Any person who is the holder of 1 per cent. or more of any class of shares in
Aer Lingus or Ryanair may be required to make disclosures pursuant to Rule 8.3
of the Takeover Rules with effect from 5 October 2006 (the commencement of the
offer period in respect of the Offer).
5 October 2006
Not for release, publication or distribution, in whole or in part, in or into or
from Australia, Canada, Japan, South Africa or the United States or any other
jurisdiction where it would be unlawful to do so
Cash Offer
by
Davy Corporate Finance and Morgan Stanley
on behalf of
Ryanair Holdings plc
for
Aer Lingus Group plc
1. Introduction
The board of Ryanair announces that it has acquired through a wholly owned
subsidiary, Coinside Limited, 84,775,000 Aer Lingus Shares representing
approximately 16 per cent. of the Issued Share Capital of Aer Lingus. The board
of Ryanair now announces the terms of a Cash Offer for Aer Lingus to be made by
Davy Corporate Finance and Morgan Stanley on behalf of Ryanair, for the entire
issued and to be issued ordinary share capital of Aer Lingus not already in the
beneficial ownership or control of Ryanair. The making of the Cash Offer is
subject to certain conditions set out in Appendix I, including, amongst other
conditions, the acceptance by Aer Lingus Shareholders holding not less than 90
per cent. of the issued and to be issued share capital of Aer Lingus (or such
lower percentage as Ryanair may determine subject always to the Takeover Rules)
not already in the beneficial ownership or control of Ryanair and the passing of
the Ryanair Shareholder Resolutions at an EGM to be held as soon as practicable
to approve the Offer.
2. The Cash Offer
On behalf of Ryanair, Davy Corporate Finance and Morgan Stanley will offer to
acquire all of the issued and to be issued share capital of Aer Lingus not
already in the beneficial ownership or control of Ryanair, subject to the
conditions and on the terms set out in Appendix I to this announcement and to be
set out in the Offer Document and the related Forms of Acceptance, on the
following basis:
€2.80 in cash for every Aer Lingus Share
The board of Ryanair believes the Cash Offer represents an excellent price for
Aer Lingus Shares given that only 8 days ago the Government of Ireland, Aer
Lingus and their respective advisers determined that €2.20 was an appropriate
price at which to issue and sell Aer Lingus Shares pursuant to the IPO.
The Cash Offer values each Aer Lingus Share at €2.80 and values the Issued Share
Capital of Aer Lingus at approximately €1.481bn. It represents:
•a premium of approximately 27 per cent. over the IPO Price of an Aer
Lingus Share of €2.20 per share; and
•a premium of approximately 12 per cent. over the Closing Price of an Aer
Lingus Share on 4 October 2006, the last day prior to the date of this
announcement, of €2.51.
In addition, the board of Ryanair notes that the Aer Lingus Share price
appreciation since the IPO occurred during the same short period in which
Ryanair acquired approximately 16 per cent. of Aer Lingus Shares at an average
price of €2.42 per Aer Lingus Share, which further emphasises the attractiveness
of the Cash Offer. On 2 October and 3 October, days during which Ryanair was not
actively buying Aer Lingus Shares, the price per Aer Lingus Share fell back from
€2.48 to €2.41.
The Offer will extend to all Aer Lingus Shares (other than those Aer Lingus
Shares already beneficially owned by Ryanair as at the date of the Offer)
unconditionally allotted or issued on the date of the Offer (including Aer
Lingus Shares issued pursuant to the Over Allotment Arrangements), together with
any further such shares which are unconditionally allotted or issued (including
Aer Lingus Shares issued pursuant to the Over Allotment Arrangements) while the
Offer remains open for acceptance or until such earlier date as, subject to the
Takeover Rules, Ryanair may determine.
The Aer Lingus Shares are to be acquired fully paid and free from all liens,
charges and encumbrances, rights of pre-emption and any other third party rights
or interests of any nature whatsoever and together with all rights
attaching thereto including the right to receive all dividends and other
distributions (if any) declared, made or paid thereafter.
The Offer shall be made by Ryanair or a wholly owned subsidiary of Ryanair.
3. Information on Aer Lingus
Aer Lingus is an Irish registered public limited company which has been quoted
on the Irish Stock Exchange and the London Stock Exchange since 2 October 2006.
Aer Lingus is an Irish airline primarily providing passenger transportation
services. For the six months ended 30 June 2006, Aer Lingus operated a single
economy class service on its short-haul network, comprising a maximum of 11
routes to the United Kingdom and 57 routes to Continental Europe, and a
two-class service on its long-haul network, including a maximum of nine routes
to the United States and one route to the United Arab Emirates. Aer Lingus also
provides cargo transportation services on its passenger aircraft, primarily on
its long-haul routes, as well as a range of ancillary services to its
passengers. Aer Lingus operates a fleet of 35 aircraft. (Source: IPO
Prospectus.)
Aer Lingus had a turnover and profit before tax of €1,002,658,000 and
€100,047,000 respectively for the year ended 31 December 2005 and €508,320,000
and €5,275,000 respectively for the six month period ended 30 June, 2006. Gross
assets of Aer Lingus at 30 June, 2006 were €1,582,142,000. (Source: IPO
Prospectus.)
4. Information on Ryanair
Ryanair operates a low fares scheduled passenger airline serving short-haul,
point-to-point routes in Europe from its bases at Dublin, London (Stansted),
Glasgow (Prestwick), Brussels (Charleroi), Frankfurt (Hahn), Milan (Bergamo),
Stockholm (Skavsta), Rome (Ciampino), Barcelona (Girona), Nottingham East
Midlands, London (Luton), Liverpool, Shannon, Pisa and Cork airports, which
together are referred to as 'Ryanair's bases of operations' or 'Ryanair's
bases'. An additional base at Marseille, France was announced during May 2006
and is expected to commence operations in November 2006. In addition, on
September 19, 2006, Ryanair announced a new base at Bremen, Germany, expected to
commence operations in April 2007. In operation since 1985, Ryanair pioneered
the low fares operating model in Europe under a new management team in the early
1990s. As of September 15, 2006, the Company offered over 750 scheduled
short-haul flights per day serving 115 locations throughout Europe, including 24
locations in the United Kingdom and Ireland, with an operating fleet of 107
aircraft flying approximately 305 routes.
Ryanair had a turnover and operating profit before taxation of €1,692,530,000
and €375,046,000 respectively for the year ended 31 March, 2006.
Aggregate expenditure by Ryanair to acquire its approximate 16 per cent.
interest in Aer Lingus was over €204.8m (excluding expenses), all of which was
funded from the cash reserves of Ryanair.
Davy Corporate Finance and Morgan Stanley are acting as financial advisers to
Ryanair.
5. Reasons for the Offer and Ryanair's Strategy for Aer Lingus
The directors of Ryanair believe that the combination of Aer Lingus and Ryanair
will create a highly efficient, pro-consumer and, above all, vigorously
competitive airline delivering lower fares for consumers.
Aer Lingus's offering on both its short-haul and long-haul routes, including its
key strategic slots in Heathrow, will complement Ryanair's different type of
offering on its rapidly growing trans-European network.
The combined strength of Ryanair and Aer Lingus would establish an Irish airline
group with over 50m passengers annually, capable of competing on the European
and World stage against other large European airline groups, including Lufthansa
/SAS/Swiss (75m passengers), Air France/KLM (70m passengers) and BA/Iberia (63m
passengers). As the European airline industry consolidates, this acquisition, if
it proceeds, will replicate previous consolidations in France (Air France/Brit
Air/Regionale/KLM), UK (BA/B.Cal/DanAir/City Express), Germany (Lufthansa/
Eurowings/Lufthansa Cityline/Swiss) and Scandinavia (SAS/Braethens).
The board of Ryanair believes that there are benefits of combining these two
Irish and European airlines into one group, and to give a flavour of what this
offer - if successful - might mean to Aer Lingus, its stakeholders and the
people of Ireland and Europe, Ryanair intends to:-
•Reduce Aer Lingus' average short haul fare (€87.55 in 2005 (source : IPO
Prospectus)) by
2 1/2% a year for a minimum period of four years;
•Reduce Aer Lingus' fuel surcharges as the price of oil falls from recent
highs;
•Retain the Aer Lingus brand;
•Retain the Heathrow slots;
•Retain all profitable routes currently operated by Aer Lingus;
•Reduce Aer Lingus' costs through improved efficiencies and Ryanair's
superior purchasing power;
•Give Aer Lingus access to the benefit of Ryanair's lower cost aircraft
deliveries and lower cost financing facilities;
•Upgrade Aer Lingus' transatlantic fleet and improve its long haul
product;
•Maintain Aer Lingus as a stand alone, separate company within one strong
Irish airline group under common ownership but run as separate competing
airlines.
As the above benefits demonstrate, the board of Ryanair intends to deliver a
publicly owned, Irish managed and headquartered airline group with the necessary
ambition, expertise, financial strength and cost base to take on European and
global competitors well into the future. As an island nation, Ireland is
critically dependent upon strong and secure low fare airline services in order
to sustain and develop tourism and economic growth. Investing in Aer Lingus is
attractive for Ryanair and its shareholders because, amongst other things, Aer
Lingus' earnings yield is superior to the returns currently available on
Ryanair's cash deposits. The board of Ryanair believes that there will be
opportunities (by combining the purchasing power of Ryanair and Aer Lingus) to
reduce operating costs, to increase efficiencies and to pass on these savings in
the form of low fares to the travelling public.
Ryanair has grown to be Europe's largest low fares airline by continuously
lowering prices and funding these reductions through cost savings and
efficiencies. The board of Ryanair believes there is an opportunity to apply
this successful low fares formula to Aer Lingus where currently, in its short
haul operation, fares and costs remain far too high. Ryanair would also expect
to work closely with Aer Lingus, if the offer is successful, to improve its long
haul operations where the board of Ryanair believes there is room to upgrade the
long haul fleet and improve this product which has not kept pace with the
competition in recent years. Since the board of Ryanair envisages that the two
companies would be run separately, in the event that the Offer is successful,
nothing in this transaction will deflect Ryanair from continuing to focus on its
own pan-European expansion or from continuing to deliver unit cost reductions
and continuing to offer lower fares to millions of Ryanair's European
passengers.
There are numerous precedents across Europe (in the UK, France, Spain, Germany
and Scandinavia) for two airlines of similar nationality coming together to form
a stronger, more widely diversified airline group. The European Union has
recognised the value of competitive European airline consolidation because of
the benefits which it brings to consumers. The board of Ryanair believes this
Offer, if successful, will result in that precedent being replicated in Ireland,
with the added benefit that customers of Aer Lingus will enjoy lower fares in
the short haul market, a better product and service in the long haul market by
reducing fuel surcharges as oil prices fall, as Ryanair applies its philosophy
of lower costs and lower fares to Aer Lingus' existing business.
6. Financing
The Offer will be financed from the cash reserves of Ryanair.
Davy Corporate Finance and Morgan Stanley confirm that they are satisfied that
resources are available to Ryanair sufficient to satisfy full acceptance of the
Offer.
7. Employees
Following the Cash Offer becoming or being declared unconditional in all
respects, the existing employment rights of the management and employees of the
Aer Lingus Group will be safeguarded in accordance with statutory requirements.
However, Ryanair would expect to continue the effective rationalisation
programme followed by Aer Lingus in recent years.
8. Ryanair Shareholder approval
In view of the size of Aer Lingus relative to Ryanair, amongst other conditions
to the Cash Offer (as set out in Appendix I), the approval of Ryanair
shareholders at an EGM is required in accordance with the Listing Rules of The
Irish Stock Exchange and the UK Listing Authority. An ordinary resolution of
Ryanair shareholders will be proposed to approve, implement and effect the Offer
by Ryanair and to authorise the directors of Ryanair to do all such things as
they consider necessary or appropriate in connection with the Offer.
9. Offer Document
The Offer Document, containing the full terms and conditions of the Offer, will
be posted as soon as practicable to Aer Lingus Shareholders.
10. Disclosure of Interests in Aer Lingus
As at the close of business on 4 October, 2006, being the latest practicable day
prior to the date of this announcement, parties acting in concert with Ryanair
owned 85,034,469 Aer Lingus Shares representing approximately 16 per cent. of
the existing issued ordinary share capital of Aer Lingus. All such Aer Lingus
Shares are owned by Coinside Limited, a wholly owned subsidiary of Ryanair
except for 259,469 Aer Lingus Shares which are held by an affiliate of Davy
Corporate Finance on its own account and on behalf of certain discretionary
clients.
Save for these interests, neither Ryanair, nor the directors of Ryanair, nor any
party acting in concert with Ryanair, owns or controls any Aer Lingus Shares or
holds any options to acquire or subscribe for any Aer Lingus Shares or any
derivative referenced to Aer Lingus Shares.
Neither Ryanair nor any persons acting in concert with Ryanair has any
arrangement in relation to Aer Lingus Shares, or any securities convertible or
exchangeable into Aer Lingus Shares or options (including traded options) in
respect of, or derivatives referenced to, Aer Lingus Shares. For these purposes,
'arrangement' includes an indemnity or option arrangement, any agreement or
understanding, formal or informal, of whatever nature, relating to relevant
securities which is, or may be, an inducement to deal or refrain from dealing in
such securities.
11. Regulatory Issues
Having taken legal advice, the board of Ryanair is confident that any regulatory
aspects relating to the consummation of the Offer are capable of being
successfully dealt with.
12. Settlement, Compulsory Acquisition, De-listing and Re-registration
The consideration will, in relation to Aer Lingus Shareholders who validly
accept the Cash Offer up to the time the Cash Offer becomes or is declared
unconditional in all respects, be despatched not later than 14 days after the
Cash Offer becomes or is declared unconditional in all respects, or thereafter
within 14 days of receipt of acceptance of the Cash Offer.
If Ryanair receives acceptances of the Cash Offer in respect of, and/or
otherwise acquires, 90 per cent. or more of the Aer Lingus Shares to which the
Cash Offer relates (and in the case where the Aer Lingus Shares to which the
Cash Offer relates are voting shares, not less than 90 per cent. of the voting
rights carried by those Aer Lingus Shares) and assuming all other conditions of
the Cash Offer have been satisfied or waived (if they are capable of being
waived), Ryanair intends to exercise its rights pursuant to the provisions of
Regulation 23 of the Takeover Regulations to acquire the remaining Aer Lingus
Shares to which the Cash Offer relates on the same terms as the Cash Offer.
As soon as it is appropriate and possible to do so and subject to the Offer
becoming or being declared unconditional in all respects, and subject to any
applicable requirements of the Irish Stock Exchange, the London Stock Exchange
or the UK Listing Authority, Ryanair intends to apply for the cancellation of
the listing of the Aer Lingus Shares on the Irish Stock Exchange and the UK
Official List and for the cancellation of admission to trading of Aer Lingus
Shares on the markets of the Irish Stock Exchange and the London Stock Exchange
and to propose a resolution to re-register Aer Lingus as a private company under
the relevant provisions of the Companies (Amendment) Act, 1983. If this
de-listing and cancellation occurs, it will significantly reduce the liquidity
and marketability of any Aer Lingus Shares not assented to the Cash Offer. It is
anticipated that the cancellations will take effect no earlier than 20 Business
Days from either the date Ryanair has acquired 75% of the voting rights in Aer
Lingus or on the first date of issue of compulsory acquisition notices by
Ryanair pursuant to Regulation 23 of the Takeover Regulations.
13. General
This announcement does not constitute an offer or an invitation to offer to
purchase or subscribe for any securities.
This announcement is made pursuant to Rule 2.5 of the Takeover Rules.
Pursuant to Rule 2.6(c), this announcement shall be available to Ryanair's
employees on Ryanair's website.
Davy Corporate Finance, which is regulated in Ireland by the Financial
Regulator, is acting exclusively for Ryanair and no one else in connection with
the Offer and will not be responsible to anyone other than Ryanair for providing
the protections afforded to clients of Davy Corporate Finance nor for providing
advice in relation to the Offer, the contents of this document or any
transaction or arrangement referred to in this announcement.
Morgan Stanley is acting exclusively for Ryanair and no one else in connection
with the Offer and will not be responsible to anyone other than Ryanair for
providing the protections afforded to clients of Morgan Stanley nor for
providing advice in relation to the Offer, the contents of this document or any
transaction or arrangement referred to in this announcement.
The availability of the Offer to persons outside Ireland may be affected by the
laws of the relevant jurisdiction. Such persons should inform themselves about
and observe any applicable requirements. The Offer will not be made, directly or
indirectly, in or into or from Australia, Canada, Japan, South Africa, the
United States or any other jurisdiction where it would be unlawful to do so, or
by use of the mails, or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce,
or by any facility of a national securities exchange of Australia, Canada,
Japan, South Africa, the United States or any other jurisdiction where it would
be unlawful to do so, and the Offer will not be capable of acceptance by any
such means, instrumentality or facility from or within Australia, Canada, Japan,
South Africa, the United States or any other jurisdiction where it would be
unlawful to do so. Accordingly, copies of this announcement and all other
documents relating to the Offer are not being, and must not be, mailed or
otherwise forwarded, distributed or sent in, into or from any jurisdiction where
it would be unlawful to do so. Persons receiving such documents (including,
without limitation, nominees, trustees and custodians) should observe these
restrictions. Failure to do so may invalidate any related purported acceptance
of the Offer. Notwithstanding the foregoing restrictions, Ryanair reserves the
right to permit the Offer to be accepted if, in its sole discretion, it is
satisfied that the transaction in question is exempt from or not subject to the
legislation or regulation giving rise to the restrictions in question.
Appendix I sets out the conditions and principal further terms of the Cash
Offer. Appendix II contains source notes relating to certain information
contained in this announcement. Certain terms used in this announcement are
defined in Appendix III to this announcement.
The directors of Ryanair accept responsibility for the information contained in
this announcement other than that relating to Aer Lingus, the Aer Lingus Group,
the directors of Aer Lingus and persons connected with them. To the best of the
knowledge and belief of the directors of Ryanair (who have taken all reasonable
care to ensure that such is the case), the information contained in this
announcement for which they respectively accept responsibility is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements' concerning the
Cash Offer, Ryanair, and Aer Lingus. Generally, the words 'will', 'may',
'should', 'could', 'would', 'can', 'continue', 'opportunity', 'believes',
'expects', 'intends', 'anticipates', 'estimates' or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. Ryanair assumes no obligation in respect of, nor
intends to update these forward-looking statements, except as required pursuant
to applicable law.
Any person who is the holder of 1 per cent. or more of any class of shares in
Aer Lingus or Ryanair may be required to make disclosures pursuant to Rule 8.3
of the Takeover Rules with effect from 5 October 2006 (the commencement of the
offer period in respect of the Offer).
Enquiries:
Ryanair Telephone: +353 1 812 1212
Howard Millar
Michael Cawley
Davy Corporate Finance Telephone: +353 1 679 6363
(Financial Adviser to Ryanair)
Hugh McCutcheon
Eugenee Mulhern
Morgan Stanley Telephone: +44 20 74255000
(Financial Adviser to Ryanair)
Gavan MacDonald
Colm Donlon
Adrian Doyle
Murray Consultants Telephone: +353 1 498 0300
(Public Relations Advisers to Ryanair) Telephone: +353 86 255 8400
Jim Milton
Pauline McAlester Telephone: +353 87 255 8300
Mark Brennock Telephone: +353 87 233 5923
Appendix I
Conditions to and certain further terms of the Offer
The Offer will be made by Davy Corporate Finance and Morgan Stanley on behalf of
Ryanair and will comply with the Takeover Rules, the rules and regulations of
the Irish Stock Exchange, the London Stock Exchange and the UK Listing Authority
and will be subject to the terms and conditions set out below and to be set out
in the Offer Document (and the Forms of Acceptance). The Offer and any
acceptances thereunder will be governed by Irish law and be subject to the
exclusive jurisdiction of the courts of Ireland which exclusivity shall not
limit the right to seek provisional or protective relief in the Courts of
another State, during or after any substantive proceedings have been instituted
in Ireland, nor shall it limit the right to bring enforcement proceedings in
another State on foot of an Irish judgment.
The Offer will be subject to the following conditions:
a. valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 p.m. on the initial closing date (or such later time(s)
and/or date(s) as Ryanair may determine, subject always to the Takeover
Rules) in respect of not less than 90 per cent. (or such lower percentage as
Ryanair may determine, subject always to the Takeover Rules) in nominal
value of the Aer Lingus Shares Affected, and, where the Aer Lingus Shares
Affected are voting shares, not less than 90 per cent. (or such lower
percentage as Ryanair may determine, subject always to the Takeover Rules)
of the voting rights carried by those Aer Lingus Shares Affected, provided
that this condition shall not be satisfied unless Ryanair shall have
acquired or agreed to acquire (whether pursuant to the Offer or otherwise)
Aer Lingus Shares carrying in aggregate more than 50 per cent. of the voting
rights then exercisable at a general meeting of Aer Lingus.
For the purposes of this condition:
i. any Aer Lingus Shares Affected which have been unconditionally allotted
shall be deemed to carry the voting rights they will carry upon their
being entered in the register of members of Aer Lingus; and
ii. the expression 'Aer Lingus Shares Affected' shall:
A. mean Aer Lingus Shares issued or allotted on or before the date the
Offer is made; and
B. mean Aer Lingus Shares issued or allotted after that
date (including, without limitation, any shares issued
pursuant to the Over Allotment Arrangements to the
extent not issued on or before the date the Offer is
made and any other Aer Lingus Shares issued pursuant to
any option or other arrangements) but before the time at
which the Offer closes, or such earlier date as Ryanair
may determine, subject always to the Takeover Rules (not
being earlier than the date on which the Offer becomes
unconditional as to acceptances or, if later, the
initial closing date); and
C. exclude any Aer Lingus Shares beneficially owned or
controlled by Ryanair on or before the date the Offer is
made;
a. the passing at the EGM of the Ryanair Shareholder Resolutions;
b. to the extent that the Offer or its implementation constitutes a
concentration within the scope of Council Regulation (EC) No 139/2004 (the
'Regulation') or is otherwise a concentration that is subject to the
Regulation, the European Commission deciding that it does not intend to
initiate proceedings under Article 6(1)(c) of the Regulation in respect of
the Offer or to refer the Offer (or any aspect of the Offer) to a competent
authority of an EEA member state under Article 9(1) of the Regulation or
otherwise deciding that the Offer is compatible with the common market
pursuant to Article 6(1)(b) of the Regulation before the first closing date
of the Offer or the date when the Offer becomes or is declared unconditional
as to acceptances (whichever is the later) and the terms or conditions to
which any such decision is or may be subject being acceptable to Ryanair in
its sole discretion;
c. to the extent that Part 3 of the Competition Act is applicable:
i. the Competition Authority, in accordance with Section 21(2)(a) of the
Competition Act, having informed Ryanair that the Offer may be put into
effect; or
ii. the period specified in Section 21(2) of the Competition Act having
elapsed without the Competition Authority having informed Ryanair of the
determination (if any) which it has made under Section 21(2) the
Competition Act; or
iii. the Competition Authority, in accordance with Section 22(4)(a) of the
Competition Act, having furnished to Ryanair a copy of its determination
(if any), in accordance with Section 22(3)(a) of the Competition Act,
that the Offer may be put into effect; or
iv. the Competition Authority, in accordance with Section 22(4)(a) of the
Competition Act, having furnished to Ryanair a copy of its determination
(if any), in accordance with Section 22(3)(c) the Competition Act, that
the Offer may be put into effect subject to conditions specified by the
Competition Authority being complied with and such conditions being
acceptable to Ryanair; or
v. the period of four months after the appropriate date (as defined in
Section 19(6) of the Competition Act) having elapsed without the
Competition Authority having made a determination under Section 22(3)
the Competition Act in relation to the Offer;
d. •all filings, where necessary, having been made and all applicable waiting
periods under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended, of the United States and the regulations thereunder having been
terminated or having expired, in each case in connection with the Offer;
e. •no central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory or investigative body, including any
national anti-trust or merger control authorities, regulatory or licensing
authority, court, tribunal, trade agency, professional association,
environmental body, any analogous body whatsoever or tribunal in any
jurisdiction or any person including, without limitation, the Company (each
a 'Third Party') having decided to take, institute or implement any action,
proceeding, suit, investigation, enquiry or reference or having made,
proposed or enacted any statute, regulation or order or having done or
decided to do anything which would or would reasonably be expected to:
i. •make the Offer or its implementation, or the acquisition or the proposed
acquisition by Ryanair of any shares in, or control of, Aer Lingus, or
any of the assets of the Aer Lingus Group void, illegal or unenforceable
under the laws of any jurisdiction or otherwise, directly or indirectly,
restrain, revoke, prohibit, materially restrict or materially delay the
same or impose additional or different conditions or obligations with
respect thereto (except for conditions or obligations that would not be
material (in value terms or otherwise) in the context of the Wider Aer
Lingus Group taken as a whole), or otherwise challenge or interfere
therewith (except where the result of such challenge or interference
would not have, or would not reasonably be expected to have, a material
adverse effect on the Wider Aer Lingus Group taken as a whole);
ii. •result in a material delay in the ability of Ryanair, or render any
member of the Ryanair Group unable, to acquire some or all of the Aer
Lingus Shares or require a divestiture by Ryanair of any shares in Aer
Lingus;
iii. •(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group taken
as a whole) require, prevent or delay the divestiture by Ryanair or by
any member of the Wider Aer Lingus Group of all or any portion of their
respective businesses, assets (including, without limitation, the shares
or securities of any other member of the Wider Aer Lingus Group) or
property or (except where the consequences thereof would not be material
(in value terms or otherwise) in the context of the Wider Aer Lingus
Group taken as a whole) impose any material limitation on the ability of
any of them to conduct their respective businesses (or any of them) or
own their respective assets or properties or any part thereof;
iv. •impose any material limitation on or result in a material delay in the
ability of Ryanair to acquire, or to hold or to exercise effectively,
directly or indirectly, all or any rights of ownership of shares (or the
equivalent) in, or to exercise voting or management control over, Aer
Lingus or (to the extent Aer Lingus has such rights) any member of the
Wider Aer Lingus Group which is material in the context of the Wider Aer
Lingus group taken as a whole or (except where the consequences thereof
would not be material (in value terms or otherwise) in the context of
the Wider Aer Lingus Group taken as a whole) on the ability of any
member of the Wider Aer Lingus Group to hold or exercise effectively,
directly or indirectly, rights of ownership of shares (or the
equivalent) in, or to exercise rights of voting or management control
over, any member of the Wider Aer Lingus Group;
v. •(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group taken
as a whole), require Ryanair or any member of the Wider Aer Lingus Group
to acquire or offer to acquire any shares or other securities (or the
equivalent) in, or any interest in any asset owned by, any member of the
Wider Aer Lingus Group owned by any third party;
vi. •cause any member of the Wider Aer Lingus Group to cease to be entitled
to any Authorisation (as defined in paragraph g below) used by it in the
carrying on of its business (except where the consequences thereof would
not be material (in value terms or otherwise) in the context of the
Wider Aer Lingus Group taken as a whole);
vii. •otherwise adversely affect the business, profits, assets, liabilities,
financial or trading position of any member of the Wider Aer Lingus
Group (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider Aer Lingus Group
taken as a whole);
viii. •impose any limitation on the ability of any member of the Wider Aer
Lingus Group to integrate or co-ordinate its business, or any part of
it, with the businesses of any member of the Wider Aer Lingus Group
(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Aer Lingus Group taken as a
whole); or
ix. •result in any member of the Wider Aer Lingus Group ceasing to be able
to carry on business under any name or in any jurisdiction under or in
which it currently does so except where the consequences would not be
material in value terms or otherwise in the context of the Wider Aer
Lingus Group as a whole;
f. •all necessary notifications and filings having been made, all necessary
waiting and other time periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction in which Aer Lingus
or any subsidiary or subsidiary undertaking of Aer Lingus which is material
in the context of the Wider Aer Lingus Group taken as a whole (a 'Material
Subsidiary') is incorporated or carries on a business which is material in
the context of the Wider Aer Lingus Group taken as a whole, having expired,
lapsed or having been terminated (as appropriate) (save to an extent which
would not be material (in value terms or otherwise) in the context of the
Wider Aer Lingus Group taken as a whole) and all statutory or regulatory
obligations in any jurisdiction in which Aer Lingus or a Material Subsidiary
shall be incorporated or carry on any business which is material in the
context of the Wider Aer Lingus Group taken as a whole having been complied
with (save to an extent which would not be material (in value terms or
otherwise) in the context of the Wider Aer Lingus Group taken as a whole),
in each case, in connection with the Offer or its implementation and all
authorisations, orders, recognitions, grants, consents, clearances,
confirmations, licences, permissions and approvals in any jurisdiction
('Authorisations') reasonably deemed necessary or appropriate by Ryanair for
or in respect of the Offer having been obtained on terms and in a form
reasonably satisfactory to Ryanair from all appropriate Third Parties
(except where the consequence of the absence of any such Authorisation would
not be material (in value terms or otherwise) in the context of the Wider
Aer Lingus Group taken as a whole), all such Authorisations remaining in
full force and effect, there being no notified intention to revoke or vary
or not to renew the same at the time at which the Offer becomes otherwise
unconditional and all necessary statutory or regulatory obligations in any
such jurisdiction having been complied with (except where the consequence
thereof would not be material (in value terms or otherwise) in the context
of the Wider Aer Lingus Group taken as a whole);
g. •all applicable waiting periods and any other time periods during which any
Third Party could, in respect of the Offer or the acquisition or proposed
acquisition of any shares or other securities (or the equivalent) in, or
control of, Aer Lingus or any member of the Wider Aer Lingus Group by
Ryanair, institute or implement any action, proceedings, suit,
investigation, enquiry or reference under the laws of any jurisdiction which
would be reasonably expected adversely to affect (to an extent which would
be material (in value terms or otherwise) in the context of the Wider Aer
Lingus Group taken as a whole) any member of the Wider Aer Lingus Group,
having expired, lapsed or been terminated;
h. •except as Disclosed, there being no provision of any arrangement, agreement,
licence, permit, franchise, facility, lease or other instrument to which any
member of the Wider Aer Lingus Group is a party or by or to which any such
member or any of its respective assets may be bound, entitled or be subject
and which, in consequence of the Offer or the acquisition or proposed
acquisition by Ryanair of any shares or other securities (or the equivalent)
in or control of, Aer Lingus or any member of the Wider Aer Lingus Group or
because of a change in the control or management of Aer Lingus or otherwise,
would or would be reasonably expected to result (except where, in any of the
following cases, the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group taken as
whole) in:
i. •any monies borrowed by, or any indebtedness or liability (actual or
contingent) of, or any grant available to any member of the Wider Aer
Lingus Group becoming, or becoming capable of being declared, repayable
immediately or prior to their or its stated maturity or the ability of
any such member to borrow monies or incur any indebtedness being
withdrawn or inhibited under any existing facility or loan agreement;
ii. •the creation or enforcement of any mortgage, charge or other security
interest wherever existing or having arisen over the whole or any part
of the business, property or assets of any member of the Wider Aer
Lingus Group or any such mortgage, charge or other security interest
becoming enforceable;
iii. •any such arrangement, agreement, licence, permit, franchise, facility,
lease or other instrument or the rights, liabilities, obligations or
interests of any member of the Wider Aer Lingus Group thereunder, or the
business of any such member with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or business)
being terminated or adversely modified or any adverse action being taken
or any obligation or liability arising thereunder;
iv. •any assets or interests of, or any asset the use of which is enjoyed
by, any member of the Wider Aer Lingus Group being or falling to be
disposed of or charged, or ceasing to be available to any member of the
Wider Aer Lingus Group or any right arising under which any such asset
or interest would be required to be disposed of or charged or would
cease to be available to any member of the Wider Aer Lingus Group
otherwise than in the ordinary course of business;
v. •any member of the Wider Aer Lingus Group ceasing to be able to carry on
business under any name under which it presently does so;
vi. •the value of, or financial or trading position of any member of the
Wider Aer Lingus Group being prejudiced or adversely affected; or
vii. •the creation of any liability or liabilities (actual or contingent) by
any member of the Wider Aer Lingus Group;
unless, if any such provision exists, such provision shall have been waived,
modified or amended on terms satisfactory to Ryanair;
i. •except as Disclosed and/or save as publicly announced (by the delivery of an
announcement to the Irish Stock Exchange and the London Stock Exchange or
otherwise publicly disclosed by the Aer Lingus Group) on or prior to 4
October, 2006, no member of the Aer Lingus Group having, since 31 December
2005:
i. •issued or agreed to issue additional shares of any class, or securities
convertible into or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible or exchangeable
securities (except for issues to Aer Lingus or wholly-owned subsidiaries
of Aer Lingus);
ii. •recommended, declared, paid or made any bonus, dividend or other
distribution other than bonuses, dividends or other distributions other
than bonus issues, dividends or other distributions lawfully paid or
made or issued to another member of the Wider Aer Lingus Group;
iii. •(save for transactions between two or more members of the Wider Aer
Lingus Group ('intra-Aer Lingus Group transactions')) made or
authorised, proposed or announced any change in its loan capital (save
in respect of loan capital which is not material (in value terms or
otherwise) in the context of the Wider Aer Lingus Group taken as a
whole);
iv. •save for intra-Aer Lingus Group transactions, implemented, authorised,
proposed or announced its intention to propose any merger, demerger,
reconstruction, amalgamation, scheme or (except in the ordinary and
usual course of trading) acquisition or disposal of (or of any interest
in) assets or shares (or the equivalent thereof) in any undertaking or
undertakings (except in any such case where the consequences of any such
merger, demerger, reconstruction, amalgamation, scheme, acquisition or
disposal would not be material (in value terms or otherwise) in the
context of the Wider Aer Lingus Group taken as a whole);
v. •except in the ordinary and usual course of business entered into or
materially improved, or made any offer (which remains open for
acceptance) to enter into or improve, the terms of the employment
contract with any director of Aer Lingus or any person occupying one of
the senior executive positions in the Wider Aer Lingus Group;
vi. •(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group, taken
as a whole) issued or agreed to issue any loan capital or (save in the
ordinary course of business and save for intra-Aer Lingus Group
transactions) debentures or incurred any indebtedness or contingent
liability;
vii. •purchased, redeemed or repaid or announced any offer to purchase,
redeem or repay any of its own shares or other securities (or the
equivalent) or reduced or made any other change to any part of its share
capital;
viii. •(except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider Aer Lingus Group
taken as a whole) (A) merged with any body corporate, partnership or
business, or (B) and save for intra-Aer Lingus Group transactions
acquired or disposed of, transferred, mortgaged or encumbered any assets
or any right, title or interest in any asset (including shares and trade
investments);
ix. •(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group taken
as a whole), entered into or varied any contract, transaction,
arrangement or commitment or announced its intention to enter into or
vary any contract, transaction, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a long term,
onerous or unusual nature or magnitude or which is or could be
materially restrictive on the business of any member of the Wider Aer
Lingus Group;
x. •waived or compromised any claim which would be material (in value terms
or otherwise) in the context of the Wider Aer Lingus Group taken as a
whole;
xi. •(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group, taken
as a whole) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or (except where the
consequences thereof would not be material (in value terms or otherwise)
in the context of the Wider Aer Lingus Group taken as a whole) ceased or
threatened to cease to carry on all or a substantial part of any
business;
xii. • (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider Aer Lingus Group
taken as a whole) and save for voluntary solvent liquidations, taken any
corporate action or had any legal proceedings instituted against it in
respect of its winding-up, dissolution, examination or reorganisation or
for the appointment of a receiver, examiner, administrator,
administrative receiver, trustee or similar officer of all or any part
of its assets or revenues, or (A) any analogous proceedings in any
jurisdiction, or (B) appointed any analogous person in any jurisdiction
in which Aer Lingus shall be incorporated or carry on any business which
is material in the context of the Wider Aer Lingus Group taken as a
whole;
xiii. •(except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider Aer Lingus Group
taken as a whole) made or agreed or consented to any significant change
to the terms of the trust deeds constituting the pension schemes
established for its directors and/or employees and/or their dependants
or to the benefits which accrue, or to the pensions which are payable
thereunder, or to the basis on which qualification for or accrual or
entitlement to such benefits or pensions are calculated or determined,
or made, or agreed or consented to any change to the trustees involving
the appointment of a trust corporation;
xiv. •entered into any agreement, contract or commitment or passed any
resolution or made any offer or announcement with respect to, or to
effect any of the transactions, matters or events set out in this
condition; or
xv. •except in the case of subsidiaries for amendments which are not
material, amended its memorandum or articles of association;
j. •except as Disclosed and/or save as publicly announced (by the delivery of an
announcement to the Irish Stock Exchange and the London Stock Exchange or
otherwise publicly disclosed by the Aer Lingus Group) on or prior to 4
October, 2006, since 31 December 2005:
i. •there not having arisen any adverse change or deterioration in the
business, assets, financial or trading position or profits of Aer Lingus
or any member of the Wider Aer Lingus Group (save to an extent which
would not be material (in value terms or otherwise) in the context of
the Wider Aer Lingus Group taken as a whole);
ii. •no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider Aer Lingus Group is or
would reasonably be expected to become a party (whether as plaintiff or
defendant or otherwise) and no investigation by any Third Party against
or in respect of any member of the Wider Aer Lingus Group having been
instituted or remaining outstanding by, against or in respect of any
member of the Wider Aer Lingus Group (save where the consequences of
such litigation, arbitration proceedings, prosecution or other legal
proceedings or investigation are not or would not be material (in value
terms or otherwise) in the context of the Wider Aer Lingus Group taken
as a whole);
iii. •no contingent or other liability existing or having arisen or become
apparent to any member of Ryanair which would reasonably be expected to
affect adversely any member of the Wider Aer Lingus Group (save where
such liability is not or would not be material (in value terms) in the
context of the Wider Aer Lingus Group taken as a whole); and
iv. •no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any licence,
consent, permit or authorisation held by any member of the Wider Aer
Lingus Group which is necessary for the proper carrying on of its
business and which is material in the context of the Wider Aer Lingus
Group;
k. •except as Disclosed, Ryanair not having discovered that any financial,
business or other information concerning the Wider Aer Lingus Group which is
material in the context of the Wider Aer Lingus Group taken as a whole and
which has been publicly disclosed, is materially misleading, contains a
material misrepresentation of fact or omits to state a fact necessary to
make the information contained therein not misleading (save where the
consequences thereof would not be material (in value terms or otherwise) in
the context of the Wider Aer Lingus Group taken as a whole);
l. •except as Disclosed and/or save as publicly announced (by the delivery of an
announcement to the Irish Stock Exchange and the London Stock Exchange or
otherwise publicly disclosed by the Aer Lingus Group) on or prior to 4
October, 2006, Ryanair not having discovered:
i. •that any member of the Wider Aer Lingus Group or any partnership,
company or other entity in which any member of the Wider Aer Lingus
Group has an interest and which is not a subsidiary undertaking of Aer
Lingus is subject to any liability, contingent or otherwise (save where
such liability is not or would not be material (in value terms or
otherwise) in the context of the Wider Aer Lingus Group taken as whole);
ii. •in relation to any release, emission, discharge, disposal or other fact
or circumstance which has caused or might impair the environment or harm
human health, that any past or present member of the Wider Aer Lingus
Group has acted in material violation of any laws, statutes,
regulations, notices or other legal or regulatory requirements of any
Third Party (except where the consequences thereof would not be material
(in value terms or otherwise) in the context of the Wider Aer Lingus
Group, taken as a whole);
iii. •that there is, or is likely to be, any liability, whether actual or
contingent, to make good, repair, reinstate or clean up any property now
or previously owned, occupied or made use of by any past or present
member of the Wider Aer Lingus Group or any other property or any
controlled waters under any environmental legislation, regulation,
notice, circular, order or other lawful requirement of any relevant
Authority (whether by formal notice or order or not) or Third Party or
otherwise (save where such liability is not or would not be material (in
value terms or otherwise) in the context of the Wider Aer Lingus Group
taken as a whole); and
iv. •that circumstances exist which are likely to result in any actual or
contingent liability to any member of the Wider Aer Lingus Group under
any applicable legislation referred to in sub-paragraph (iii) above to
improve or modify existing or install new plant, machinery or equipment
or to carry out any changes in the processes currently carried out (save
where such liability is not or would not be material (in value terms or
otherwise) in the context of the Wider Aer Lingus Group taken as a
whole);
m. •for the purposes of the conditions set out above:
i. •'Disclosed' means disclosed in the IPO
Prospectus;
ii. •'Aer Lingus Group' means Aer Lingus and its
subsidiaries and subsidiary undertakings
including its associated undertakings and
any entities in which any member holds a
substantial interest;
iii. •'Wider Aer Lingus Group' means Aer Lingus
or any of its subsidiaries or subsidiary
undertakings or associated companies
(including any joint venture, partnership,
firm or company or undertaking in which any
member of the Aer Lingus Group (aggregating
their interests) is interested) or any
company in which any such member has a
substantial interest;
iv. •'initial closing date' means 3.00 p.m.
(Dublin time) on the date fixed by Ryanair
as the first closing date of the Offer,
unless and until Ryanair in its discretion
shall have extended the initial offer
period, in which case the term 'initial
closing date' shall mean the latest time and
date at which the initial offer period, as
so extended by Ryanair, will expire or, if
earlier, the date on which the Offer becomes
or is declared unconditional in all
respects;
v. •'initial offer period' means the period from
the date of the Offer Document to and
including the initial closing date;
vi. •'parent undertaking', 'subsidiary
undertaking', 'associated undertaking' and
'undertaking' have the meanings given by the
European Communities (Companies: Group
Accounts) Regulations, 1992; and
vii. •'substantial interest' means an interest
in 20 per cent. or more of the voting equity
capital of an undertaking.
Subject to the requirements of the Panel, Ryanair reserves the right (but shall
be under no obligation) to waive, in whole or in part, all or any of the above
conditions apart from conditions (a), (b), (c) and (d).
The Offer will lapse unless all of the conditions set out above have been
fulfilled or (if capable of waiver) waived or, where appropriate, have been
determined by Ryanair to be or to remain satisfied on the day which is 21 days
after the later of the initial closing date, the date on which condition (a) is
fulfilled or such later date as Ryanair may, with the consent of the Panel (to
the extent required) decide. Except for condition (a), Ryanair shall not be
obliged to waive (if capable of waiver) or treat as satisfied any condition by a
date earlier than the latest day for the fulfillment of all conditions referred
to in the previous sentence, notwithstanding that any other condition of the
Offer may at such earlier date have been waived or fulfilled or that there are
at such earlier dates no circumstances indicating that the relevant condition
may not be capable of fulfillment.
To the extent that the Offer would give rise to a concentration with a Community
dimension within the scope of Council Regulation (EC) No 139/2004 (the
'Regulation'), the Offer shall lapse if the European Commission initiates
proceedings in respect of that concentration under Article 6(1)(c) of the
Regulation or refers the concentration to a competent authority of a Member
State under Article 9(1) of the Regulation before the first closing date of the
Offer or the date when the Offer becomes or is declared unconditional as to
acceptances, whichever is the later.
If the Offer lapses, it will cease to be capable of further acceptance. Aer
Lingus Shareholders who have already accepted the Offer shall then cease to be
bound by the acceptances delivered on or before the date on which the Offer
lapses.
Appendix II
Bases and sources
1. Unless otherwise stated, the financial information on Aer Lingus is
extracted from the IPO Prospectus.
2. Unless otherwise stated, all non-financial information on Aer Lingus
is extracted from the IPO Prospectus.
3. Unless otherwise stated, the financial information on Ryanair is
extracted from the audited financial statements of Ryanair for the year
ended 31 March 2006.
4. The value of the entire issued and to be issued ordinary share
capital of Aer Lingus is based on the Issued Share Capital of Aer
Lingus.
5. Aer Lingus share prices are sourced from the Daily Official List of
the Irish Stock Exchange save for the IPO Price which was sourced from
an announcement by Aer Lingus and the Minister for Transport of Ireland
dated 27 September 2006.
Appendix III
Definitions
'Aer Lingus' or Aer Lingus Group plc, a public limited company
the 'Company' incorporated in Ireland;
'Aer Lingus Aer Lingus and its subsidiary undertakings and
Group' or the associated undertakings;
'Group'
'Aer Lingus the existing issued fully paid ordinary shares of
Share' or 'Aer €0.05 each in the capital of Aer Lingus and any
Lingus Shares' further such shares which are unconditionally
allotted or issued after the date hereof and before
the Offer closes (or before such other time as the
Offeror may, subject to the Takeover Rules, decide in
accordance with the terms and conditions of the
Offer);
'Aer Lingus the holders of Aer Lingus Shares (excluding Ryanair
Shareholders' or any member of the Ryanair Group);
'Australia' the Commonwealth of Australia, its states,
territories and possessions and all areas subject to
its jurisdiction or any sub-division thereof;
'Business Day' any day on which banks are open for business in
Dublin not being a Saturday, Sunday or public
holiday;
'Canada' Canada, its provinces, territories and all areas
subject to its jurisdiction and any political
sub-division thereof;
'Cash Offer' the cash offer of €2.80 per Aer Lingus share;
'Coinside' or a private limited company incorporated in Ireland and
'Coinside a wholly owned subsidiary of Ryanair;
Limited'
'Competition Act' the Competition Act 2002 (as amended by the
Competition Act 2006);
'Competition The Irish Competition Authority established under the
Authority' Competition Act;
'Continental the continent of Europe excluding Ireland and the UK;
Europe'
'Closing Price' the official closing price or the middle market
quotation of an Aer Lingus Share, as appropriate, as
derived from the Official List;
'Davy Corporate Davy Corporate Finance Limited, a wholly owned
Finance' subsidiary of J&E Davy, trading as Davy;
'EGM' the extraordinary general meeting of Ryanair (or any
adjournment thereof) to be held for the purpose of
considering, and if thought fit passing, the Ryanair
Shareholder Resolutions;
'Euro' or '€' the single currency of member states of the European
Union that adopt or have adopted the Euro as their
currency in accordance with legislation of the
European Union relating to European Economic and
Monetary Union;
'Financial the Irish Financial Services Regulatory Authority;
Regulator'
'Forms of the forms of acceptance or other acceptance documents
Acceptance' which will accompany the Offer Document;
'IPO' the initial public offering of Aer Lingus Shares
undertaken in accordance with the IPO Prospectus;
'IPO Prospectus' the prospectus issued by Aer Lingus dated 12
September 2006 in connection with the initial public
offering of Aer Lingus Shares;
'IPO Price' the price at which each Aer Lingus share was offered
pursuant to the IPO, being €2.20;
'Ireland' Ireland, excluding Northern Ireland and the word
Irish shall be construed accordingly;
'Irish Stock The Irish Stock Exchange Limited;
Exchange'
'Issued Share the entire issued ordinary share capital of Aer
Capital of Aer Lingus being 528,990,552 Aer Lingus Shares inclusive
Lingus' of 14,638,217 Aer Lingus Shares comprised in the Over
Allotment Arrangements and referred to in an
announcement of Aer Lingus dated 3 October, 2006;
'Japan' Japan, its cities, prefectures, territories and
possessions and all areas subject to its jurisdiction
or any sub-division thereof;
'London Stock London Stock Exchange plc;
Exchange'
'Morgan Stanley' Morgan Stanley & Co. Limited;
'Offer' the Cash Offer to be made by Davy Corporate Finance
and Morgan Stanley on behalf of the Offeror for the
entire issued and to be issued share capital of Aer
Lingus (other than any Aer Lingus Shares beneficially
owned or controlled by Ryanair) on the terms and
subject to the conditions set out in this
announcement and to be set out in the Offer Document
and the Forms of Acceptance, and where the context so
permits or requires, any subsequent revision,
variation, extension or renewal thereof;
'Offer Document' the document to be sent to Aer Lingus Shareholders
containing the terms and conditions of the Offer;
'Offer Period' the period commencing on 5 October, 2006 and ending
on the initial closing date or, if later, the time at
which the Offer becomes unconditional as to
acceptances or lapses, whichever first occurs;
'Offeror' Ryanair;
'Offeror Group' the Offeror and its subsidiary undertakings;
'Official List' the Official List of the Irish Stock Exchange and/
or the Official List of the UK Listing Authority,
as the context so requires;
'Over Allotment the arrangements pursuant to which, amongst other
Arrangements' things, the Stabilising Manager subscribed or may
subscribe for Aer Lingus Shares as such
arrangement is more particularly described in
paragraph 13 of part XIV of the IPO Prospectus;
'Panel' the Irish Takeover Panel established under the
Irish Takeover Panel Act 1997;
'Ryanair' Ryanair Holdings plc, a public limited company
incorporated in Ireland or, where the context so
admits, any wholly owned subsidiary of Ryanair
Holdings plc;
'Ryanair Group' Ryanair and its subsidiary undertakings and
associated undertakings;
'Ryanair the passing at the EGM of such resolutions as may
Shareholder be necessary to approve, implement and effect the
Resolutions' Offer;
'South Africa' The Republic of South Africa, its provinces,
possessions and territories, and all areas subject to
its jurisdiction and any political sub-division
thereof;
'Stabilising AIB Capital Markets plc incorporating AIB Corporate
Manager' Finance Limited and Goodbody Stockbrokers;
'Takeover the European Communities (Takeover Bids (Directive
Regulations' 2004/25/EC)) Regulations 2006;
'Takeover Rules' the Irish Takeover Panel Act, 1997, Takeover Rules
2001 to 2005, as applied, with amendments, by the
Takeover Regulations, or any of them as the context
may require;
'UK Listing the Financial Services Authority of the United
Authority' Kingdom acting in its capacity as competent authority
for the purposes of Part VI of the UK Financial
Services and Markets Act 2000;
'United Kingdom' the United Kingdom of Great Britain and Northern
or 'UK' Ireland;
'United States' the United States of America its territories and
or 'US' possessions, any state of the United States and the
District of Columbia.
All amounts contained within this announcement referred to by '€' and 'c' refer
to the Euro and cent.
Any reference to any provision of any legislation shall include any amendment,
modification, re-enactment or extension thereof.
Any references to a 'subsidiary undertaking', 'associated undertaking' and
'undertaking' have the meaning given by the European Communities (Companies:
Group Accounts) regulations 1992.
Any reference to a subsidiary has the meaning given to it by section 155 of the
Companies Act 1963.
Words importing the singular shall include the plural and vice versa and words
importing the masculine gender shall include the feminine or neutral gender.
All times referred to are to Dublin time unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange