Ryanair has removed a restriction on non-EU nationals buying the group’s Dublin-listed shares in a move that could significantly boost their value and further reduce the price gap between the airline’s Dublin and New York-listed stock.
On Friday, Ryanair said an ownership and control review of the group has established that EU nationals now own “more than 50 per cent of the company’s issued share capital”.
With that threshold crossed, Ryanair confirmed it has removed the prohibition on non-EU nationals buying its shares listed on Euronext Dublin, which it introduced in 2002 due to European rules and expanded to UK nationals in 2021 after Britain left the EU. This means investors from EU third countries, including Britain and the United States, can once again buy the airline’s European shares – although they will still be prohibited from voting at the airline’s annual meetings.
The move is likely to funnel US investor demand for Ryanair’s shares into its Dublin-listed stock, market sources said on Monday.
It also opens up the possibility that Ryanair could rejoin certain global equities indices from which it had been excluded as a consequence of its share structure, which could boost interest in the stock.
Under European airline licensing laws, carriers are not allowed to have more than 49.9 per cent of their shares held by investors outside the bloc.
This was a particular issue for Ryanair after Brexit when its existing UK shareholders suddenly became non-EU nationals after Brexit, diluting the share of the company held by EU citizens from about 54 per cent to under 40 per cent.
The airline took steps at the time to ensure its EU ownership would not be further diluted, barring existing shareholders from outside the EU from voting at its annual general meeting (AGM).
Chief executive Michael O’Leary indicated at the group’s AGM last September that Ryanair would return to 50 per cent EU ownership in the first half of 2025 as it continues handing cash back to investors through its share buyback programme.
Mr O’Leary said last September that Ryanair would probably keep the voting restrictions in place even if it removed the buying restrictions “because at least that would ensure that we maintain EU control”.
He said at the time he was in favour of removing the ownership restriction, which he said could help Ryanair’s ordinary shares catch up in value to its US-listed American depository receipts (ADRs), US trading certificates in foreign companies.
Ryanair’s ADRs have tended to trade at a higher price than its ordinary shares.
However, the gap has narrowed significantly in recent months from around 30 per cent at one point last year to 8.6 per cent when the markets closed on Friday.
Mr O’Leary told reporters last September that he does not believe the US shares are trading at a premium to Ryanair’s ordinary shares but rather that its Dublin-listed shares are trading at a discount.
Citing the examples of CRH and Paddy Power owner Flutter Entertainment, he said Irish companies have seen their share prices soar in recent times after delisting from the Euronext Dublin and moving to New York.
“We need to do something similar with Ryanair’s stock,” he said at the September AGM. “I don’t think we will migrate to a US stock exchange listing because of the need to be majority EU owned. But certainly, once we get to [majority EU ownership], I would certainly be in favour of removing the ownership restriction.”
Ryanair’s Dublin-listed shares rose by close to 3.3 per cent in early trading on Monday to €21.07 per share.
