Aer Lingus says Ryanair's bid significantly undervalues the airline

The Aer Lingus Employee Share Ownership Trust's decision to reject the offer effectively ends Ryanair's approach.

The trust owns 12.6% of the airline. Its decision means 46.6% of investors are against the bid, making it almost impossible for Ryanair to succeed.

Ryanair, which holds 19.2% of the firm, said it intended to remain a long-term shareholder in Aer Lingus if it fails.

Last week it extended its offer until 4 December.

Ryanair made its �1bn bid last month, telling Aer Lingus staff they could earn �40,000 selling their shares, however the company asked all of its shareholders to reject the approach as it "significantly undervalued" the airline.

The Irish government has a 28% stake in Aer Lingus and has refused to sell it.

Should Ryanair's bid fail it will be prevented from bidding for its Irish rival for 12 months.

Rejection

In a statement the Impact trade union, which represents Aer Lingus cabin crew pilots and middle managers, said the staff shareholder trust's decision had "grounded" Ryanair's bid.

"By rejecting the offer, which was worth far less to them than Ryanair claimed, staff and other Trust members have shown they are no mugs," an Impact statement added.

News of the latest rejection of the Ryanair bid came on the day that Ryanair chief executive Michael O'Leary sold part of his stake in the no-frills airline in a deal worth almost 25m euros ($32.4m; �16.9m).

No explanation was given for his decision to sell the 2.5 million shares.