IAG: Cash Offer for Aer Lingus Group plc

Aer Lingus Airbus A330-200 (GFDL 1.2 A.Gordos)
Aer Lingus Airbus A330-200 (GFDL 1.2 A.Gordos)

The board of International Consolidated Airlines Group, S.A. (“IAG”) and the independent directors of Aer Lingus Group plc (“Aer Lingus”) announced that they have reached agreement on the terms of a recommended cash offer to be made by AERL Holding Limited (“AERL Holding”), a wholly-owned subsidiary of IAG, for the entire issued and to be issued ordinary share capital of Aer Lingus.

• Aer Lingus Shareholders will receive €2.55 in cash for each Aer Lingus Share, comprising:

• a cash payment of €2.50 per Aer Lingus Share; and

• the payment of a cash dividend of €0.05 per Aer Lingus Share (payable on 29 May 2015 to Aer Lingus Shareholders on the register of members on 1 May 2015).

• The transaction values Aer Lingus’ entire issued and to be issued ordinary share capital at approximately €1.4 billion and the terms of the transaction represent a premium of approximately:

• 40.1 per cent. to the closing price of €1.82 per Aer Lingus Share on 17 December 2014 (being the last dealing day prior to the commencement of the offer period); and

• 76.5 per cent. to the volume weighted average price of €1.44 per Aer Lingus Share for the six month period ended 17 December 2014.

• The IAG Board believes that the acquisition of Aer Lingus has a compelling strategic and financial rationale for the IAG Group at an attractive price for Aer Lingus Shareholders. The Acquisition is expected to provide substantial benefits to both IAG and Aer Lingus customers through an enhanced network, particularly to North America, using Dublin as a natural gateway hub for transatlantic routes. Furthermore, the IAG Board expects the transaction to deliver compelling financial benefits and value creation for IAG shareholders.

• Recognising the importance of the Aer Lingus brand and of direct air services and connectivity for investment and tourism in Ireland, IAG has agreed the basis for legally binding commitments with the Government of Ireland which ensure that:

• Aer Lingus will continue to hold its existing slots at London Heathrow;

• Aer Lingus will operate (i) its current daily winter and summer scheduled frequencies between London Heathrow and Dublin, Cork and Shannon for at least seven years post-acquisition, and (ii) in the first five years post-acquisition, its other London Heathrow slots on routes to/from airports on the island of Ireland; and

• Aer Lingus will operate all of its scheduled international air transport passenger services under the Aer Lingus brand, and maintain Aer Lingus as its registered name and its head office and place of incorporation in the Republic of Ireland.


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