Aer Lingus (EI, Dublin International) has confirmed that it received a proposal from the International Airlines Group (IAG) - parent to British Airways, Vueling Airlines, and Iberia - early last week only to reject it.

In a filing to the Dublin Stock Exchange, the Irish carrier said it had rejected the "preliminary, highly conditional and non-binding approach" from the IAG on the grounds that "it fundamentally undervalues Aer Lingus and its attractive prospects."

While neither party disclosed the value of the pitch made, the Irish Times quotes industry sources as saying it was 'around' EUR1billion (USD1.21billion).

Aer Lingus' counts the Irish government and rival Ryanair (FR, Dublin International) as shareholders with 25% and 29.8% stakes respectively. Following a lengthy court process, the latter was earlier this year directed to cut its stake in Aer Lingus to below 5% - a directive it has moved to contest. Ryanair has, however, said it would be willing to dispose of its shareholding to any European airline that had the backing of 50.1% or more of Aer Lingus’s shareholders.