Business

Activist hedge fund increases stake in Ryanair to more than 7%

London-based Parvus Asset Management bought nearly €230m worth of Ryanair shares earlier this week

Parvus Asset Management, an activist hedge fund based in London, has pushed its stake in Ryanair to just over 7%, Photograph: Sasko Lazarov/RollingNews.ie

Barry J Whyte
Fri Mar 8 2024 - 17:49

Parvus Asset Management, an activist hedge fund based in London, has pushed its stake in Ryanair to just more than 7 per cent, new stock exchange filings show. It previously held just more than 6 per cent of the Irish airline.

The hedge fund bought nearly €230 million worth of shares earlier this week, and its total holding in Ryanair is now worth €1.6 billion.

Ryanair shares are currently trading at just under €20.50 having risen steadily from a recent low of over €14 in October of last year.

Parvus Asset Management was founded by Edoardo Mercadante. It has around $5.5 billion of assets under management. The asset manager has previously held similarly large positions in Ryanair before ultimately reducing them in size, though the firm does have a history of taking what are known as activist positions – in which they use their large size to force the company’s board into making changes in strategy.

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In 2016, for example, Parvus wrote a letter to betting firm William Hill to say it was “extremely concerned” over a plan to do a deal with Amaya, the owner of Poker Stars. In 2011 it announced publicly that it would vote against the proposed purchase by G4S of another entity, ISS.

The hedge fund was also involved in the merger of two Italian banks, Intesa Sanpaolo and UBI Banca.

Parvus holds the shares through a relatively complex financial instrument known as an equity swap, which can allow a fund to build up a stake in a company cheaply and through the use of leverage.

In November, Ryanair announced half-year profits of €2.18 billion, up nearly 60 per cent compared to the €1.37 billion it made in the same period in 2022. The company said at the time that it would pay €400 million to shareholders in February and September 2024.

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