Saturday 22 October 2011

Ryanair stake must go - Aer Lingus

Courtesy of The Irish Times

AER LINGUS chairman Colm Barrington has told Ryanair chief executive Michael O’Leary in a letter that Ryanair’s stake in Aer Lingus “cannot be maintained in the long term” and has had “a significantly detrimental impact” on the Aer Lingus share price.
Writing in response to a letter from Mr O’Leary, Mr Barrington said the company did not intend “to engage with further public debate” with him on issues including Aer Lingus’s pensions, dividends and its “leave and return” redundancy scheme.
“Such public debate with a single self-interested shareholder is not in the best interests of all our shareholders,” he wrote.
The Aer Lingus chairman also dismissed Ryanair’s criticism of its share price. “It was your decision to invest your shareholders’ funds to purchase Aer Lingus shares in 2006,” Mr Barrington writes.
“It is our view that the shareholding cannot be maintained in the long term.”
Mr Barrington repeated Aer Lingus’s willingness to have “constructive discussions” with Ryanair about its claim that it is open to selling its 29 per cent stake – as long as Ryanair is “truly interested” in such a disposal.
Ryanair and Aer Lingus have exchanged a series of tit-for-tat letters in recent weeks, with much of the dispute revolving around Aer Lingus’s €30 million settlement with the Revenue in relation to the controversial “leave and return” scheme.
Ryanair deputy chief executive Howard Millar, at a recent Aer Lingus event for investors in London, accused its management of a “cover-up” for not releasing an external report on the scheme.
In his letter to Mr O’Leary dated October 20th, Mr Barrington refers to Mr Millar “disrupting” the investor event.
Mr Barrington also writes that Mr O’Leary did “not made any substantive new points”. “You appear intent on ignoring our previous responses on these matters simply because the facts we have outlined and the views we have expressed are at variance with your own stated opinions.”

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