Monday 16 September 2019

US activist investor becomes Ryanair's largest shareholder

Chicago's Harris Associates now leads way with 7pc stake as investor Capital Group keeps cutting its stake in airline

Ryanair's shares have fallen by about a third over the past year. Stock Image
Ryanair's shares have fallen by about a third over the past year. Stock Image
John Mulligan

John Mulligan

THE Chicago-based activist investor Harris Associates is now the single largest shareholder in Ryanair, with just over a 7pc stake.

The change at the top table of the airline's shareholders occurred just this week, as US investment giant Capital Group continued to cut its holding in the airline, bringing it to 6.8pc.

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Harris Associates, which manages about $120bn (€106bn) of assets, insists it's not an activist investor, but is regularly cited as such in other dealings.

There is now no single Ryanair shareholder with a stake of more than 10pc.

The changes have also emerged as US hedge fund giant Citadel continues to up the ante in its bet against Ryanair's shares.

The latest filings with the Central Bank here show that the group now holds a combined 1.6pc short position in the carrier, currently valued at about €188m based on Ryanair's almost €11.8bn market capitalisation.

When investors short a share, they are betting the share price will drop.

They borrow the company's shares from other shareholders and can profit if the price falls by buying back shares at a lower price to return them to their original owner.

But short positions can turn sour if the share price in the target company rises.

The short position in Ryanair is held via two Citadel entities. Citadel Europe now has a 1.1pc short position in Ryanair, while Citadel Advisors has 0.5pc.

Citadel was founded by its chief executive, billionaire Ken Griffin. The company has about $30bn (€26.4bn) of assets under management.

A year ago, Capital was the biggest Ryanair shareholder by far, with a 16.5pc stake in the carrier at the end of March that year which was worth more than €3bn. Its stake tipped 17pc last August, but it then started offloading shares.

This week, Capital reduced its holding from 7.3pc to 6.8pc. At the beginning of May, it had held 9pc.

After a number of changes in its shareholding over the past 12 months, HSBC still has a 5.4pc stake, which is lifted to slightly more than 6pc when other financial instruments are included.

Fidelity, which owned 5.8pc of the carrier at the end of March last year, cut its stake to below 3pc last October.

Asset management firm Baillie Gifford, which is headquarted in Edinburgh, still owns about 4pc of Ryanair, having held a similar stake at the end of the airline's 2018 financial year. Ryanair CEO Michael O'Leary owns about 3.8pc of the carrier.

Ryanair's shares have fallen by about a third over the past year. Its profit fell almost 30pc in its last financial year, to €1.02bn.

Irish Independent

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