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Ryanair drops Aer Lingus bid amid probe

Dublin-based Ryanair's $1.95 billion bid for Aer Lingus was unexpected and prompted an EU investigation into restricted competition for flights from Dublin to London. (John Cogill/Associated Press)

DUBLIN -- Ryanair Holdings PLC said its $1.95 billion hostile bid for Aer Lingus PLC has lapsed after the European Union said it would start a probe into the proposed takeover.

EU regulators yesterday started an in-depth investigation on concerns Ryanair's takeover of Aer Lingus will restrict competition for flights from Dublin to London.

Europe's biggest discount airline, is "disappointed" by the commission's "unnecessary" investigation, chief executive Michael O'Leary said. "This could and should have been decided" earlier, he added.

The takeover would have combined two Dublin-based airlines that handle about 61 percent of flights at the Irish capital's airport. The bid was rejected by the Irish government and Aer Lingus employee shareholders, who together control almost 40 percent of the carrier. Aer Lingus stock has closed below the offer price of $3.69 per share since Nov. 7.

Ryanair, which said yesterday all acceptances received are void, will make a further offer if the EU review gives the necessary clearance. Regulators would have to approve this offer as Irish takeover rules prohibit Ryanair from making a further offer for 12 months after the original offer lapses.

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