Makor Securities Merger Arbitrage and Special Situations 3 | P a g e However, the issue we believe is politics. The Irish Ministry of Finance controls sufficient votes in Aer Lingus to block any Heathrow slot transfer and they also have specific guidelines as to the number of slots they consider “critical to ensure connectivity” with Ireland. IAG is likely to have to agree not to dispose of certain number of slots to comply with such guidelines. For this reason, the offer requires an irrevocable form the Ministry of Finance and Ryanair. Even if all these issues are agreed, the deal would require clearance from the EC and it would be scheduled to complete no earlier than H1 2015. Ireland’s election is due to take place no later than April 2016 but the parties would use the deal as a political football. This is another reason we believe the deal is unlikely to trade close to the terms even if/when firmed and therefore chasing the deal at current share price €2.40 (given the potential downside) seems premature in our view. Research Disclaimer This publication has been prepared by Makor Capital Limited (“Makor Capital”) and is intended for professional or qualified investors only. Makor Securities LLP (“Makor Securities”)is distributing this material to its clients who are Eligible Counterparties or Professional Clients under FSA Rules. It may also be disseminated to persons who are Investment Professionals within the meaning of the Financial Services and Markets Act 2000 (Financial Promotion) order 2005. In the United States Makor Capital only distributes this material to major US institutional investors (as that term is defined in Rule 15 a-6 of the Securities and Exchange Act of 1934) and to SEC registered broker-dealers or banks acting in a broker –dealer capacity” If you do not fall into any of these categories you should disregard it. This research material is a marketing communication. It is not investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is not subject to any prohibition on dealing ahead of the dissemination of investment research. It has not been produced by Makor Securities. This material does not take into account the particular investment objectives, financial situation or needs of individual clients or other recipients. Before acting on this material, clients and other recipients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. This material should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This material is produced by research providers which Makor Securities believes to be reliable, but Makor Securities does not warrant or represent (expressly or impliedly) that it is accurate, complete, not misleading or as to its fitness for the purpose intended and it should not be relied upon as such. Opinions expressed will be the current opinions of those producing the research as of the date appearing on this material only. We expect those producing the material in this report to update it on a timely basis but can give no undertaking that they will do so and regulatory compliance or other reasons may prevent them from doing so (or us from disseminating updated material). Members and employees of Makor Securities LLP, employees of Makor Capital, Makor Capital Markets and any firm producing this material (including Alternative Investment Management Research SA (“AIM&R”),) may from time to time have long or short positions in securities, warrants, futures, options, derivatives or other financial instruments referred to in this material. For Makor Securities, this information is set out in our Conflicts of Interest Policy which is available on request. Policies for the production of research from research providers (including AIM&R) are available on request.