SHARES in Ryanair shot up dramatically in Dublin and New York yesterday, after pricing for the heavily oversubscribed offer was announced.
In Dublin the shares soared 120p in one day's trading to close at 315p while New York recorded an $11 (£7.20) jump to close at $25 1/2. At the Dublin closing price Ryanair was worth £500 million. The Ryan family raised £48 million from the sale of shares. They retained a 33 per cent stake in the company, which increased in value yesterday from £101 million to £164 million.
From an offer price of 195p the shares immediately rose 30 per cent to 250p on the "grey" market in Dublin where shares can be bought and sold in advance of the full stock exchange listing of the shares. By the close of business in Dublin, Ryanair shares had risen 62 per cent to 315p, a 120p premium on the offer price in their first day's trading. Dealers in Dublin said the shares traded in heavy volume with strong institutional demand.
The sharp price rise reflects the pent up demand for the shares after the company's offer of 54.2 million shares was 15 times oversubscribed.
In New York, the shares jumped immediately to $22 from the launch price of 514.73. By the close on the NASDAQ market the shares had risen in heavy trading to 525 1/2, a premium of over $11 on the offer price. One American Depositary Share, quoted on NASDAO in New York is equal to five Irish shares.
There was huge volume in Ryanair ADR's on NASDAQ, with 8.6 million ADR's, equivalent to 43 million ordinary shares, trading. Sources said that much of the buying was from Irish and British institutions who were finding it difficult to find stock on the Irish market. The $25 1/2 closing price on NASDAQ is equivalent to 337p for Ryanair ordinary shares based on current exchange rates. Official trading on both markets begins next week.
Ryanair offered 54.2 million shares, or 34.3 per cent of the company, to the market at a price of 195p per share. The offer was heavily oversubscribed with buyers bidding to buy about 813 million shares.
The sale raised £116.5 million for the company and the Ryan family, when an option given to the underwriters Morgan Stanley and Investment Bank of Ireland, to buy an additional 5.6 million shares from the Ryan family and Irish Air, is included. The net amount generated for the company was £57.8 million after fees are taken into account.
At the 195p offer price Ryanair was worth £309 million. But the strong rise in the share price meant by the close of business in Dublin, Ryanair was worth £500 million.
Ryanair's founding shareholders, Dr Tony Ryan and his three sons, Cathal, Decian and Shane, sold 20.8 million of the 54.2 million shares offered, raising £40.6 million. Under the "green shoe" option to underwriters they sold an additional four million shares to generate about £8 million.
Following the share sale the Ryan family owns 33 per cent stake of the company. Chief executive Mr Michael O'Leary has a 14.1 per cent stake in Ryanair he exchanged a profit sharing bonus scheme under which he was entitled to 50 per cent of company profits for Ryanair shares. His stake rose in value yesterday from £44 million to £71 million, a gain of £27 million. Irish Air, the investment vehicle of US entrepreneur Mr David Bonderman, acquired a 15.7 per cent stake in the company for about £1 million. Worth £45 million at the offer price, the value of the stake rose yesterday to £73 million. Irish Air now owns 14.6 per cent.
