Aer Lingus valued at (£971m) by British Airways

Irish airline Aer Lingus to approve a new takeover bid by British Airways owner IAG

In a fresh bid submitted by British Airways, IAG has quoted the price of around  €2.50 (£1.87) per share. IAG also controls Iberia in Spain has provided the deal which values the Irish airline at about €2.50 (£1.87) per share. Irish government still holds around 25% share in Aer Lingus and is thus assumed to have political barriers to the takeover bid. Aer Lingus has already refused two bids from IAG last year, but is said to accept the revised pricing and valuations.

Analysis: Following analysis was presented by BBC correspondent which states a win win situation for all stake holders. 

By acquiring Aer Lingus, IAG would gain more take-off and landing slots at Heathrow - valued at around £30m per pair - allowing it to operate more flights. For Ryanair, any takeover of Aer Lingus by IAG is about the money, for BA it is about the landing slots at Heathrow airport, and for the Irish government it is all about jeopardising the main transport link into an island economy. From a purely business point of view it makes sense for the deal to proceed once a decent price has been agreed.But it will really struggle to get political blessing in Dublin - especially a year out from a general election. The Irish Labour Party will resist the sale, while the centre right Fine Gael party will only approve it if connectivity from Cork and Dublin into what it sees as Britain's only hub airport is maintained.
The prize for BA and Iberia in owning Aer Lingus is huge. They could open up all sorts of interesting route options for both airlines such as flights to large rapidly developing but poorly served cities in the Far East. Ireland may fear that the Aer Lingus brand could go the same way as BMI - into the history books line. However, opposition Irish MPs have called on the Irish government to veto any takeover bid, which might cede control of the national carrier. A senior government source told the BBC: "The issue of landing slots at Heathrow airport is crucial for the Irish government and was discussed at a parliamentary party meeting on Weds. "You have to have flights from Dublin and Cork into a major hub and the Irish government would drive a hard bargain. "
A spokesman for the rival Irish carrier Ryanair, which has been trying to sell its 29% stake in Aer Lingus, said if it received an offer for the Airline "the board will consider it".

Er Jigna Shah  [BE, MBA]
Sub Editor