Aer Lingus share price down, appoints new CEO amid takeover talks

Aer Lingus Group Plc has appointed Stephen Kavanagh to replace Christoph Mueller as chief executive as the Irish airline continues takeover negotiations with International Airlines Group.

Mr. Mueller, who joined the company in 2009, announced last year that he will step down from the lead position and join Malaysia Airlines as chief executive.

During his time at the helm, Mr. Mueller helped the company expand its trans-Atlantic routes and rebuff a takeover offer from Ryanair Holdings in 2012.

Mr. Kavanagh, 47, joined the company in 1988 and took various roles and in 2006 reached an executive position. Also he was a part of the companys initial public offering team.

In 2009 he was appointed chief financial officer and his most recent role was as chief strategy and planning officer. Mr. Kavanagh is set to take the lead on March 1, the Dublin-based airline said in a statement.

“Stephen has been a key member of the executive team that has transformed Aer Lingus into a strong, profitable airline with a resilient business model and an improved cost base,” said Chairman Colm Barrington.

The change of leadership comes amid negotiation talks with British Airways-parent IAG. The company has offered €1.4 billion for the Irish carrier, which is 25% owned by the government.

Aer Lingus board has recommended the takeover offer, but the deal is still subject to shareholder approval.

Last week IAGs CEO Willie Walsh visited his hometown Dublin in order to rally political support for the bid, which values Aer Lingus at €2.50 a share with a dividend of €0.05.

A key concern of the government is the future of Aer Lingus landing slots at Londons Heathrow. Mr. Walsh, former CEO of Aer Lingus, once again reassured that IAG will not sell the slots at Europes busiest airport.

Additionally, worker unions are also voicing their concerns about possible job cuts, which are mostly likely to be undertaken should IAG take control of the Irish company.

The bid comes ahead of Irelands general elections, which must be held before April 3 2016, and many politicians have expressed their opposition towards the deal, including Health Minister Leo Varadkar.

Aer Lingus lost 1.78% on Friday and closed at 2.21 in Dublin. On Monday the stock slid 1.45% to €2.18 at 13:44 GMT, marking a one-year decrease of 34.10%. The company is valued at €1.18 billion.

According to the Financial Times, the 2 analysts offering 12-month price targets for Aer Lingus have a median target of €2.25, with a high estimate of €2.80 and a low estimate of €1.70. The median estimate represents a 1.81% increase from the last closing price.