Irish airline Aer Lingus's Employee Share Ownership Trust (ESOT) has exercised its right to buy more shares in the airline from the government, giving it a 12.58 percent stake, it was announced on Monday.

ESOT, which has yet to say whether it will back the EUR1.48 billion (USD$1.88 billion) takeover bid launched earlier this month by budget airline Ryanair, said in a stock exchange announcement it had bought an additional 15.5 million shares for 2.20 euros each.

Under the terms of an agreement with Ireland's finance minister, the price was the same as that at which Aer Lingus shares were listed late last month and well below Ryanair's surprise offer of 2.80 euros a share a few days after the stock market debut.

Aer Lingus repeated on Monday its opposition to the offer after Ryanair sent out a document detailing its bid.

"The offer from Ryanair is without merit. It fails to recognize the unique position of the group's businesses," Aer Lingus Chairman John Sharman said in a statement.

"The offer also ignores the significant regulatory issues that a combination would face. A takeover by Ryanair, no matter how it is dressed up, would be bad for Aer Lingus, for its shareholders, for its employees and for consumers."

Ryanair believes the offer is generous enough to secure the 50.1 percent stake it is seeking for control of Aer Lingus and insists fares at the airline would fall under its control.

The Irish government, which confirmed its stake would fall to 25.35 percent following the sale to the ESOT, has said it will not sell its shares to Ryanair and unions also oppose a takeover.

Other opponents include Irish businessman Denis O'Brien who has built up a defensive holding of 2.1 percent while pilots at the carrier hold 2.3 percent.