Ryanair shares were on the ascent yesterday as US activist investor Harris Associates revealed it had bought a 3.1 per cent stake in the budget airline.
Harris, a Chicago-based firm which has previously battled for change at advertising agency Saatchi & Saatchi and mining giant Glencore, is now in the top five Ryanair shareholders and owns £457million worth of stock.
Since Harris calls itself a ‘value investor’, and latches onto companies which it believes are trading at a ‘substantial discount to intrinsic value’, its interest in Ryanair could be seen as an endorsement for the stuttering airline.
Shares climbed 2.6 per cent, or 0.36c, to €14.25 following the announcement – a welcome break for the airline which has recently struggled with striking pilots, customers’ compensation cheques bouncing and outcry over its more expensive cabin baggage policy.
Harris, a Chicago-based firm which has previously battled for change at advertising agency Saatchi & Saatchi and mining giant Glencore, is now in the top five Ryanair shareholders
Ryanair has suffered its worst-ever strikes this summer, as pilots across Europe have rebelled over working conditions, causing hundreds of flight cancellations and delays.
It has been working with unions to try to quell the unrest, making steps towards an agreement with the Irish pilots’ union last week and signing a collective labour agreement with the Italian equivalent yesterday.
Harris did not respond to a request regarding what shape its involvement with Ryanair would take.
Stock Watch – Petroneft Resources
Shares in Russian oil and gas explorer Petroneft soared as it hit the jackpot.
It said flow rates from its C-4 well in the licence 67 area of the Cheremshanskoye field were ‘very encouraging’, making shares surge 12.5 per cent, or 0.18p, to 1.58p.
Licence 67 is in the Tomsk region of Siberia. Petroneft owns half of the asset, while Arawak Energy – part of energy company Vitol – owns the other half. This was the first well drilled by Petroneft with the help of 3D seismic data.
The US firm has been quiet during its involvement with Lloyds Banking Group, where it is the largest shareholder, but in its most high-profile case in 1994 its chief investment officer David Herro was credited with orchestrating a shareholder rebellion which ousted Maurice and Charles Saatchi from the advertising agency they had founded.
The FTSE 100 was revived after the bank holiday, climbing 0.52 per cent, or 39.73 points, to 7617.22.
Miners got a boost as investors’ risk appetite rose, after the US and Mexico signed a trade agreement.
Russian steelmaker Evraz was the blue chip index’s largest riser climbing 5.4 per cent, or 26.4p, to 518p.
Gulf-focused private healthcare company NMC Health also jumped as it denied speculation it was heading into India.
The firm, which operates private hospitals and fertility clinics in countries like the United Arab Emirates and Saudi Arabia, said it was focused on the Gulf region – with the exception of its fertility business, which it previously announced was branching out into Europe and Africa.
Russ Mould, investment director at AJ Bell, said: ‘Big strategic moves can generate headlines and market excitement but often it is best for a company’s management to stick to the knitting, focusing on what they are good at rather than operating outside of their realm of expertise.’ Shares rose 3.6 per cent, or 136p, to 3948p.
On London’s junior market, Angle, a medical firm which is investigating new techniques to identify cancer tumours using blood tests, was given the thumbs up from investors.
A study showed its Parsortix system can detect glioblastoma, a type of brain cancer, from a blood test. Previously, experts had thought that the cancer cells could not pass through the blood-brain barrier.
Angle’s founder and chief executive Andrew Newland said the company would report ‘further developments in due course’. Shares were up 5.4 per cent, or 2.5p, to 49p.