The board of Irish airline Air Lingus is considering a Eu2.55 per share offer from BA owner IAG, having rejected two previous bids from the group last year.
Any acceptance of the revised offer of Eu1.36 billion will depend on both rival airline Ryanair which has a 29.8% stake in Aer Lingus and the government which has a 25% stake.
Commenting, investment bank Jefferies said: "Hurdles remain to Aer Lingus accepting IAG's revised €2.55 a share bid, but on balance we think a deal will get done. The deal would be positive for IAG, adding further growth avenues to the already exciting outlook, and for Ryanair shareholders, who could rightly expect a cash windfall."
A recent financial report showed that Air Lingus had its best summer trading in years with profits up 19% to Eu112.9 million (£88.5 million) with its shares rising 2.7% to Eu2.42 in London with IAG adding 1.8% to 545.5p making the value of the company £10.9 billion.
