[Article] Aer Lingus price estimated at over €1bn

Ruu_Old

from rte.ie

RTÉ News has learned that advisors to the Aer Lingus flotation have experienced stronger than anticipated demand for shares which will be sold by the Government.

Aer Lingus will be worth between €1.1bn and €1.3bn after it joins the stock market, according to a document due to be published tomorrow.

Advisors have held 200 discussions with potential investors. In those contacts investors have expressed strong demand for the shares which will be sold by the Government in the privatisation.

The document will say the airline will raise €530m of which €104m will go to the Aer Lingus pension fund.

The State will get cash of around €250m from the deal. It will also retain a shareholding of between 25% and 35%.

However, the strong demand for the shares means the Government will have the ability to reduce its shareholding closer to 25% if it wishes.

The price of shares will finally be set on the night of 26 September. First dealing in the stock will begin on 27 September.

The current value of the airline before the flotation proceeds is €600m to €770m.

The document will show that its trading profits have remained flat at €19m for the first half of the year. That is partly down to higher costs including higher fuel charges.

The figures will show its sales have increased by 12% to €508m. Its passenger numbers on European routes are up 12% to 3.6 million. However, customers on US routes have slipped slightly.

dunkamania

sounds pricey,

I think the prospectus is out today,if anyone sees it online,please post a link;)

SouperComputer

tis a long one:

The Observer wrote:

Aer Lingus floats on 'open skies' promise

The state-owned Irish carrier needs to convince investors to take a leap of faith if its planned privatisation is to be successful

Oliver Morgan
Sunday September 3, 2006
The Observer

At long last Aer Lingus, the state-owned Irish carrier, has done what many think it should have done several years ago and announced plans to float on the London Stock Exchange.

But for chief executive Dermot Mannion - like others who have floated their businesses this year, including Standard Life's Sandie Crombie and Qinetiq's John Chisholm - persuading investors that the time is right may prove difficult.

Mannion believes he can do it, not least because the trade unions, long opposed to privatisation, are behind the move - thanks partly to the fact that €100m of the float proceeds will go straight to the company pension fund.

'It is vitally important for Aer Lingus to grow,' Mannion says. 'We have a successful business model, combining short haul with long-haul full service, and everyone knows we need new equity to grow.' To that end, the float will raise some €2bn (£1.3bn).

Some will agree, saying flotation comes not a moment too soon. It is four years now since the post-9/11 turnaround of the airline made the name of previous chief executive Willie Walsh - propelling him to the top job at British Airways - and made Aer Lingus one of the most profitable carriers in Europe. Indeed, it was a row with the Irish government - an Aer Lingus shareholder - over the constraints of public ownership and the inability to raise investment cash that led Walsh and two senior colleagues to leave the Dublin-based carrier last year.

But others will question whether now is a good time: memories of the terrorist threat that shut down UK air travel last month will still be fresh at the float date, pencilled in for later this month.

Other factors include the credibility of Mannion's aim to expand the business profitably. Mannion is bullish. With costs slashed both under Walsh and since (there were 6,300 employees in 2001; last year there were 3,475), Mannion wants to double its Airbus long-haul fleet to 14 aircraft and add 15 Airbus A320s to its fleet of 28.

But the question for investors is: can the past be a guide to the future for Aer Lingus? In recent years fuel costs have spiralled and fares have been slashed, on both long- and short-haul routes, in bitter price wars. While Aer Lingus flew 8 million passengers in 2005 - a million more than the year before - its revenues and profits fell because yields (revenue per seat) dropped by 16.2 per cent on short haul and by 4.7 per cent on transatlantic routes.

Investors will, therefore, be very interested in the 'risk factors' section of the Aer Lingus prospectus. Stephen Furlong, analyst at Dublin-based Davy Stockbrokers , says: 'There will almost have to be a leap of faith.'

While there may be sound reasons behind what Mannion is proposing, Furlong says that some elements of it are highly risky, while the impact of others, such as the prospect of more competition from Ryanair at Dublin and an 'open skies' agreement freeing up transatlantic travel - important for Aer Lingus's longhaul operations - will not be in place by the time of the offer.

Ryanair is Aer Lingus's chief shorthaul rival at its Dublin base. It has lower costs, higher margins, a bigger market share and fuller planes on most of the routes where the two airlines compete out of Dublin.

On top of this, Ryanair chief executive Michael O'Leary has turned his guns directly on Dublin. For several years he has increased Ryanair capacity from other bases across Europe - to the point where the airline now operates a fleet of 107 Boeing 737 aircraft across the continent and has up to 179 more on order.

However, on 9 August, O'Leary announced announced a major expansion at Dublin, with 12 new routes and three new aircraft based there.

'It will be a hard fight,' Mannion says. 'We have competed successfully with Ryanair for a long number of years.' He adds that Aer Lingus has more prime early-morning slots than its rival, and will be able to maintain some of the current €20 premium it has over Ryanair even if yields are squeezed.

Though there are some doubts. Chris Avery, aviation analyst at JP Morgan, says: ' Aer Lingus has had a relatively high fare monopoly on routes to Madrid, Bologna and Seville for several years. That is now over. People might tend to forget about this because the financial impact will not be known by the time of the float: the new Ryanair planes do not arrive until December.'

Another central pillar of the Aer Lingus plan is the €1.2bn development of Dublin airport, which it hopes to use as a 'mini-hub'. Part of the expansion of the short-haul network - Aer Lingus says it flies to up to 68 destinations in the UK and Europe - will be to feed its long-haul services from Dublin. Furlong believes that the airport has the right geographical position, and advantages such as a high volume of passengers and a large catchment area. It has also secured permission from the US, Aer Lingus's chief long-haul destination, for passengers to clear US immigration in Ireland. All of these could help it succeed where other mini-hubs, such as Gatwick and Manchester, have failed.

He says Aer Lingus wants open skies because it will increase the number of US cities to which it can fly from four - New York, Boston, Chicago and Los Angeles - to perhaps 15. It also wants an end to the 'Shannon stopover' - every other flight between Dublin and the US has to stop at the west-of-Ireland airport.

Open skies agreement was hoped for in October this year, but has been delayed until March at the earliest. Some are sceptical about it ever happening.

This is the main leap of faith investors will have to make, says Furling. 'In many ways the strategy is ultimately dependent on open skies. Without it ... that would delay or possibly restrict the expansion they want.' Avery has other doubts: 'It remains to be seen if Dublin is big enough to justify these extra aircraft, particularly in the business market.'

But Mannion believes that even if a full deal is not reached, a bilateral one with the US could see Shannon restrictions diluted and a further three destinations permitted in advance. Open skies would also increase the value of Aer Lingus's 21 pairs of take-off and landing slots at Heathrow. These currently serve shuttles to Dublin, but could be used for transatlantic services, or even sold - although there are question marks over this because the Irish government, which will retain 25.1 per cent of the company, may block it.

Investors will be better informed when the prospectus is published. But it is their view on those unanswered questions - open skies, the battle with Ryanair, the future at Dublin and Heathrow - that will determine whether they have the faith to take the leap.

SouperComputer

From here

Aer Lingus Website wrote:

AerLingus.comLow Fares. Way Better.

The information provided in this website is subject to updating, completion, revision, verification and amendment until the admission of the Aer Lingus Shares to the official lists of the Irish Stock Exchange and the UK Listing Authority and to trading on the London Stock Exchange has become effective. The contents of this website have been prepared by and are the sole responsibility of the Company, and have been approved by AIB Capital Markets plc, Bankcentre, Ballsbridge, Dublin 4, Ireland and UBS Limited, 1/2 Finsbury Avenue, London, EC2M 2PP, United Kingdom for the purposes of section 21(2) (b) of the Financial Services and Markets Act 2000 of the United Kingdom.

Becoming a Shareholder in Aer Lingus
# Company Overview
# Key Financials
# FAQ Section
# Management team

Overall offer details

The Minister for Transport of Ireland, Martin Cullen T.D., and Aer Lingus Group plc (the "Company") has announced the intention to seek admission of the Company's ordinary shares ("Ordinary Shares") to the Official Lists of each of the Irish Stock Exchange and the United Kingdom Financial Services Authority and to proceed with an initial public offer of Ordinary Shares, comprising an offer of existing Ordinary Shares by the Minister for Finance of Ireland (the "Selling Shareholder"), and an offer of new Ordinary Shares by the Company (together the "Offer").

AIB Corporate Finance and UBS Investment Bank have been appointed as joint sponsors to the Offer. AIB Capital Markets (incorporating AIB Corporate Finance and Goodbody Stockbrokers) and UBS Investment Bank have been appointed as advisers to the Irish Government, joint global co-ordinators and joint bookrunners to the Offer. Goldman Sachs International and Merrion Stockbrokers have been appointed as joint lead managers to the Offer and as advisers to the Company.

* It is expected that the prospectus in connection with the Offer, including the price range, will be published in the second week of September.


* It is expected that pricing of the Offer will take place in late September.


* It is expected that the net proceeds of the Offer received by the Company will be used primarily to finance the expansion of Aer Lingus' short-haul and long-haul fleet. A one-off pension contribution will also be made.


* The Minister for Finance will retain a significant minority shareholding of at least 25.1 per cent in the Company.


* It is intended that immediately following the Offer in excess of 50 per cent of the Company's issued share capital will be held by Irish shareholders (including the Selling Shareholder, the Aer Lingus Employee Share Ownership Trust, Aer Lingus employees and qualifying Irish institutional and retail investors).


* The Offer will comprise an institutional offer, a private placement in the United States to qualified institutional buyers and an intermediaries offer in Ireland.


* Members of the public in Ireland and the United Kingdom will be able to apply for Ordinary Shares in the intermediaries offer through a participating stockbroker subject to a minimum subscription of €10,000. Investors participating in the Intermediaries Offer will be eligible to receive one additional Ordinary Share (a "Bonus Share") for every 20 Ordinary Shares acquired in the Offer held continuously for a full year after admission. The participating stockbrokers are Goodbody Stockbrokers, Merrion Stockbrokers, Bloxham Stockbrokers, Campbell O'Connor & Co., Davy, Dolmen Stockbrokers, Fexco Stockbroking Ltd and NCB Stockbrokers. Further details of the intermediaries offer including the outline timetable will be announced shortly.


Key Dates

August 2006
Monday 28th Announcement of Intention to Float.


September 2006
Mid-September Issue of price range prospectus.
Late September Flotation of Aer Lingus on the Dublin and London stock exchanges.


How and where to apply

To register your interest in purchasing Aer Lingus Shares you must contact one of the following intermediaries:

Goodbody Stockbrokers 01 641 6000 (existing clients) 01 447 5109 (non clients)
Merrion Stockbrokers 01 240 4280
Bloxham Stockbrokers 01 611 9200
Campbell O'Connor & Co 01 677 1773
Davy 01 614 9900
Dolmen Stockbrokers 01 633 3633
FEXCO Stockbroking Ltd 01 661 1800
NCB Stockbrokers 01 611 5611

Further information on how and where to apply is available in the FAQ Section. ______________________________________________________________________

This information is not for distribution in any jurisdiction where such distribution would be illegal. The information contained herein does not constitute an offer for sale in the United States. The shares described herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the ''U.S. Securities Act''), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state securities laws. The contents of this website have been prepared by and are the sole responsibility of the Company, and have been approved by AIB Capital Markets plc, Bankcentre, Ballsbridge, Dublin 4, Ireland and UBS Limited, 1/2 Finsbury Avenue, London, EC2M 2PP, United Kingdom for the purposes of section 21(2) (b) of the Financial Services and Markets Act 2000 of the United Kingdom.

ircoha

bounty wrote:

so for example if i buy €10,000 worth of shares at lets say €2.5, and if this price holds for the first year, i get 500 shares free. so thats €1250

10,000/2.5 = 4000/20 = 200 * 2.5 = 500:)

rondjon

dunkamania wrote:

sounds pricey,

What's your basis for this comment? Compared to Ryanair (on a price, nothing to do with value, only basis), they're cheap as chips.