prohibition

Ryanair, the discount European airline, is preparing for a fight with regulators over its deal to buy Aer Lingus.

On Tuesday, Ryanair said the European Commission “intends to prohibit” its offer for Aer Lingus, despite the airline’s attempts to appease antitrust concerns. Ryanair added that it planned to appeal the decision.

“It appears clear from this morning’s meeting, that no matter what remedies Ryanair offered, we were not going to get a fair hearing and we’re going to be prohibited regardless of competition rules,” Robin Kiely, head of communications for the airline, said in a statement.

The deal has been troubled from the start.

Ryanair moved to buy Aer Lingus last summer, offering 694 million euros ($931 million) in its third attempt to buy the Irish carrier. Management trumpeted the opportunities, saying the deal would create “one strong Irish airline group capable of competing with Europe’s other major airline groups.”

But the board of Aer Lingus immediately rejected the hostile takeover bid, saying it undervalued the airline and would raise antitrust concerns. Ryanair’s first bid to buy Aer Lingus in 2007 was blocked for antitrust reasons.

Since then, Ryanair has sought to assuage concerns about competition, lining up buyers for various operations and routes.

Even so, regulators notified Ryanair on Tuesday that they would block the deal. Ryanair now says it has instructed its lawyers to “appeal any prohibition decision” to the courts.

“This decision is clearly a political one to meet the narrow, vested interests of the Irish government and is not based on competition law,” Ryanair said in a statement.

Aer Lingus supported the regulatory decision, saying it was “a much stronger airline today than it was at the time of the previous Ryanair offers” and that it was the only rival to Ryanair on a large number of routes.

“The reasons for prohibition are therefore even stronger in this instance than with the previous offers,” Aer Lingus said in a statement. “Therefore, it was and remains Aer Lingus’ position that the offer should never have been made.”

Article source: http://dealbook.nytimes.com/2013/02/12/ryanair-indicates-regulators-will-reject-aer-lingus-deal/?partner=rss&emc=rss

Daniel Barry/European Pressphoto AgencyTPG Capital is exploring working with Jerry Yang, Yahoo’s co-founder, on making a minority investment in the company.

The private equity firm TPG Capital has signed a nondisclosure agreement with Yahoo, making it one of the first potential suitors to begin formal due diligence work on the company, which is weighing a sale, people briefed on the matter told DealBook on Thursday.

TPG’s decision comes even as many other private equity shops are balking at signing such an agreement, since its terms include a prohibition on talking with other potential suitors. Many of these possible bidders have argued that such a “no cross-talk” provision would limit their ability to cobble together a full takeover offer for Yahoo, given the company’s nearly $20 billion market value.

But TPG is exploring making a minority investment in Yahoo, working with the company’s co-founder, Jerry Yang, these people said. In one potential plan, TPG would buy up perhaps a 20 percent stake in Yahoo, while Mr. Yang and another co-founder, David Filo, would roll in their roughly 10 percent stake.

After a planned stock buyback, financed with additional debt, TPG could control a majority stake of Yahoo.

TPG is in the early stages of due diligence and may decide not to make an investment, these people said. A minority investment is only one of many possibilities that Yahoo’s board is weighing, alongside a sale of the whole company.

Mr. Yang, the former chief executive of Yahoo who famously rebuffed a $44.6 billion bid from Microsoft in 2008, is not exclusively speaking to TPG. The board member has spoken to several private equity firms, according to people with knowledge of the matter. Although the process has involved the company’s interim chief executive, Timothy R. Morse, it is uncertain if Mr. Yang and any possible deal will have the full support of the company’s board.

Mr. Yang and other directors have had conversations with potential partners at the behest of the Yahoo board’s transaction committee, according to a person close to the company.

It is also unclear how such a plan would be treated by Yahoo’s restive shareholders. While they could choose to sell some of their holdings through stock buyback, it would leave Yahoo relatively intact, with Mr. Yang still playing a major role at the company. Some of the turnaround plans being contemplated include a major overhaul of Yahoo and its management.

Meanwhile, Yahoo’s talks with the Alibaba Group have cooled.

Last month, Alibaba submitted an unsolicited formal offer for the company’s Asian assets, but Yahoo has not seriously reviewed the deal. The offer placed a lower valuation on Alibaba than did a recent offer by a consortium of investors to buy back shares from employees, one of the people briefed on the matter said.

Because Yahoo did not appear to take the offer seriously, Alibaba is now considering pursuing other strategic options, this person added. It’s possible that these could include participating in an investor consortium seeking to buy all of Yahoo.

Yet an Alibaba deal is still possible, according to two people close to Yahoo. In fact, the negotiations with the private equity firms could serve the additional purpose of giving Yahoo more leverage in future deal talks.

TPG, whose holdings range from First Data to the J. Crew Group, and Yahoo are already on familiar terms. Both are based in the San Francisco area, and Mr. Yang serves on Stanford’s board of trustees alongside James Coulter, one of TPG’s co-founders.

Spokesmen for TPG, Yahoo and Alibaba declined to comment.

Peter Lattman contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=33c46595fd2ce4c7490da53d0ab5a4d0

DealBook: Ryanair Indicates Regulators Will Reject Aer Lingus Deal

DealBook: TPG Capital Enters the Fray for Yahoo

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