Ryanair shares closed at an all-time high in Dublin and London yesterday following confirmation that the airline had successfully completed its secondary offering of 28.86 million shares. In Dublin the shares dealt up 87 cents to €9.27 (£7.30), up from €8.40 and in London, in exceptionally heavy trading, the shares soared more than 60p to £6.031/2p with around 32 million shares changing hands. The shares are also quoted on the NASDAQ and in early trading were up over 11 per cent.
Ryanair's share price has also been buoyed by record pre-tax profits of £59.7 million (€75.8 million) announced just 10 days ago.
The shares were priced at £6.60 (€8.38) and at £5.40 sterling and the offer was five times oversubscribed, Mr Michael Cawley, Ryanair's chief financial officer and commercial director, said.
Investors who subscribed for shares and whose allocations were scaled back are thought to have gone back into the market yesterday to buy more shares, thus pushing up the price. The majority of the stock was placed with British and leading European institutions, Ryanair said.
The company's shareholders had embarked on the share offering because it wanted to broaden its investor base. There was also a feeling that the company was still being perceived as a Ryan family company, because of its high stake-holding (27.6 per cent).
Mr Cawley said the breakdown of European to US investors, remained at just over 50 per cent European, with the remaining stock being held in the US. To qualify for the benefits of airline deregulation in Europe, Ryanair's European shareholders must hold over 50 per cent of the shares. Mr Cawley said European shareholders hold more than 50 per cent and, in any case, there is a mechanism whereby, if more than 50 per cent of the shares fall into US hands, those investors can be made to sell them back to European investors.
The US investors got the majority of the 5.2 million shares which were sold by Irish Air General Partnership - the investment vehicle of Ryanair chairman Mr David Bonderman. The remaining shares went to European investors, he said.
Ryanair chief executive Mr Michael O'Leary said the over-subscription was testament to the success of the Ryanair story and showed "the increasing acceptance by UK and European institutions of the high growth prospects of Ryanair's low fares formula across Europe". Mr David Bonderman said that as the American investment community had been active supporters "of the Ryanair story and it is particularly pleasing that the work which the company and its brokers have undertaken in the UK and European markets in recent years is now bearing fruit." He added that Ryanair was now a widely held stock with a very strong combination of leading US and European institutions.
The Ryan family sold 20.8 million shares, netting them more than £137.3 million. It reduces their shareholding to 15 per cent. Mr O'Leary sold over 2.5 million shares, garnering him £16.6 million and reducing his shareholding down to 10.7 per cent.
Irish Air General Partnership sold 5.2 million shares raising £34.3 million. The offering of 28.9 million shares included the underwriters over-allotment option of 3.5. Its shareholding is now 3.2 per cent.
