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Last Updated: Friday, 27 October 2006, 13:24 GMT 14:24 UK
Aer Lingus escalates war of words
Ryanair and Aer Lingus planes
Aer Lingus says Ryanair is indulging in flights of fancy
The war of words between Ryanair and its bid target Aer Lingus has taken a fresh turn with Ryanair being accused of making "misleading" statements.

Aer Lingus said Ryanair was guilty of making "serious inaccuracies and misrepresentations" in its statements.

Ryanair boss Michael O'Leary had said that Aer Lingus staff selling their shares to him would receive a 60,000 euro (40,000; $76,000) bonanza.

But Aer Lingus has retorted that this is untrue and it can prove it.

Tough talk

Aer Lingus' Employee Share Ownership Trust (ESOT) has a 12.6% stake in the airline, making it an important player in the tussle for control.

ESOT has yet to say whether it favours the Ryanair bid. But it has denied that Aer Lingus staff would get the 60,000 euros for their shares that Mr O'Leary has promised.

Each employee would receive 38,864 euros for their shares under the terms of Ryanair's 1.5bn euro bid, ESOT said.

ESOT is investigating Ryanair's assertion that gains its members made by selling shares would be tax-free if used to buy Ryanair stock.

The Irish government holds a 28% stake in Aer Lingus and has refused to sell this to Mr O'Leary.

Among recent comments directed at Aer Lingus by Mr O'Leary was a claim that the airline was planning job cuts that would leave its staff worse off than under a Ryanair regime.

Aer Lingus management says it may have to cut jobs to remain competitive in a marketplace where budget carriers like Ryanair have made an enormous impact.

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