Aer Lingus looks set to accept an improved takeover offer from British Airways owner International Airlines Group.

The latest offer of  €2.55 per share values the Irish flag carrier at €1.3 billion.

IAG confirmed this morning: “The board of Aer Lingus has indicated to IAG that the financial terms of the proposal are at a level at which it would be willing to recommend to Aer Lingus shareholders, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties.

“Accordingly the board of Aer Lingus has granted IAG access to perform a limited period of confirmatory due diligence.”

IAG pledged to operate Aer Lingus as a separate business with its own brand, management and operations.

The carrier would continue to provide connectivity to Ireland, “while benefitting from the scale of being part of the larger IAG group”.

Aer Lingus would join the join the Oneworld alliance alongside British Airways and Iberia together with the transatlantic joint business between BA and American Airlines “leveraging the natural traffic flows between Ireland and the US and the advantageous geographical position of Dublin for serving connecting flows”.

“IAG believes that the proposal would secure and strengthen Aer Lingus’s brand and long term future within a successful and profitable European airline group, offering significant benefits to both Aer Lingus and its customers,” the company said.

“IAG recognises the importance of direct air services and air route connectivity for investment and tourism in Ireland and intends to engage with the Irish government in order to secure its support for the transaction.”

Aer Lingus said: “Having considered this request, the board has indicated to IAG that the financial terms are at a level at which it would be willing to recommend, subject to being satisfied with the manner in which IAG proposes to address the interests of relevant parties.

“The board notes IAG’s intentions regarding the future of the company, in particular that Aer Lingus would operate as a separate business with its own brand, management and operations, continuing to provide connectivity to Ireland, while benefitting from the scale of being part of the larger IAG group.”

Ryanair, which holds almost 30% of Aer Lingus, has yet to comment on the developments earlier this morning.