RYANAIR's third bid to buy Aer Lingus is to be discussed by the Government as it prepares to sell its 25.1pc stake next year.
A sale of its shares could land it a €175m windfall, one aviation expert said today.
Ryanair has offered €1.30 per share for the 70pc of Aer Lingus it does not own, putting an overall value of some €694m on the carrier.
The offer is well ahead of the €1 share price that transport Minister Leo Varadkar previously indicated would be the minimum price acceptable.
Aer Lingus, in a brief statement this morning, said its board "notes the announcement by Ryanair Holdings plc of its intention to make a third unsolicited offer of 100pc of the entire issued and to-be-issued share capital of Aer Lingus.
"Aer Lingus will make a statement in due course. In the meantime, Aer Lingus shareholders are urged to take no action," it added.
The offer came on the same day that the UK Competition Commission started an investigation into Ryanair's 29.8pc holding in the airline.
Ryanair chief executive Michael O'Leary said that the offer was "the best way for Aer Lingus to continue to be owned, controlled and managed from Ireland for the benefit of Irish citizens and visitors".
He insisted that a successful takeover would result in more passenger traffic and more jobs.
Ryanair already owns 29.8pc of Aer Lingus, having spent about €400m acquiring the shares between 2006 and 2007.
Aviation expert Gerry Byrne said on RTE's Morning Ireland today that the €170m offer could prove "very tempting".
But he said a takeover would mean Ryanair would control 80pc of all air traffic into and out of Ireland, and anyone could object to the competition authority.
While there had been major mergers of airlines in Europe, Ireland was a different case as it did not have the continent's road and rail infrastructure.
Aer Lingus is expected to launch a formal takeover defence later today.
Fianna Fail's transport spokesman Timmy Dooley called on the Government to use its shareholding to prevent Ryanair from taking control.
Abu Dhabi airline Etihad recently acquired an almost 3pc stake in Aer Lingus and its boss, James Hogan, has said he would be interested in the possibility of acquiring the Government's Aer Lingus stake.
The main obstacle to any takeover would be the European Commission, which blocked an earlier Ryanair bid for Aer Lingus in July 2007.
Ryanair has said it would be willing to address any concerns held by the EC.
The no-frills airline said that the increase in capacity at Dublin Airport, the consolidation of airlines across Europe and the Government's commitment to the Troika to sell its stake in Aer Lingus resulted in a different set of circumstances.