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Irish carrier Aer Lingus rejects takeover bid by British Airways parent IAG; shares surge

FILE - A Wednesday, June 20, 2012 file photo showing a flock of sheep paying no heed as two Aer Lingus jets taxi and take off at Dublin Airport, Ireland. The Dublin-based carrier has rejected a takeover bid by IAG, the parent company of British Airways and Spain's Iberia. Aer Lingus previously has rejected three bids from its major Irish rival Ryanair, which is Aer Lingus' biggest shareholder. (AP Photo/Shawn Pogatchnik)

FILE - A Wednesday, June 20, 2012 file photo showing a flock of sheep paying no heed as two Aer Lingus jets taxi and take off at Dublin Airport, Ireland. The Dublin-based carrier has rejected a takeover bid by IAG, the parent company of British Airways and Spain's Iberia. Aer Lingus previously has rejected three bids from its major Irish rival Ryanair, which is Aer Lingus' biggest shareholder. (AP Photo/Shawn Pogatchnik)  (The Associated Press)

Irish airline Aer Lingus has rejected a takeover bid by the International Consolidated Airlines Group, the parent company of British Airways and Spain's Iberia.

Shares in the Dublin-based carrier surged by as much as 21 percent Thursday amid rumors of a possible bid. Those gains were pared after IAG issued a statement confirming its proposal had been rejected by the Aer Lingus board.

Analysts long have seen IAG as a likely bidder for Aer Lingus. IAG chief executive Willie Walsh was previously chief executive of Aer Lingus before the formerly state-owned airline's 2006 privatization.

Aer Lingus operates a substantial European short-haul network and a half-dozen routes to the United States. In recent years it has struggled to compete with larger Dublin-based rival Ryanair, which has mounted three failed takeover bids.