UK regional airline company Flybe Group Plc (LON:FLYB) said it had signed a deal under which it would acquire several aircraft and operating routes from Irish peer Ryanair Holdings Plc (LON:RYA), if the latter manages to successfully take over its rival Aer Lingus Group Plc (LON:AERL).
The planned transaction is part of a package of concessions sent to the European Commission (EC) by Ryanair in an attempt to finally obtain the regulator’s nod for its Aer Lingus buyout.
As part of the deal, Ryanair would form a new company, to be known as Flybe Ireland, and transfer to it a total of 43 European routes along with requisite number of slots and licences to operate them. In addition, the Irish company would contribute at least nine Airbus A320 aircraft and inject EUR100m (USD135.3m) in cash. In turn, Flybe will acquire the new company for EUR1m.
The move will only be carried out in the event that the EC clears Ryanair’s bid for Aer Lingus by 6 March 2013 and the transaction is completed in May. On the other hand, the Flybe Ireland deal is seen to close in October, after its potential buyer conducts due diligence and posts a circular to its own stockholders for approval. Flybe noted it has already received irrevocable acceptances representing 64% of the shareholders.
Yesterday, however, Aer Lingus’s CEO Christoph Mueller told journalists he expects the EC to once again block Ryanair’s takeover offer despite the proposed remedies. According to him, it is doubtful whether Flybe would be an independent competitor to Ryanair after such a move.
So far, European Union (EU) regulators had banned twice Ryanair’s effords to buy the 70% stake it does not already have in Aer Lingus. The latest offer of EUR1.30 per share values the target at EUR694m.