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Ryanair to change share buyback plans due to Brexit

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Ryanair will change the way it conducts a €700m share buyback programme due to fears over a no-deal Brexit, the company said.

Bosses revealed in May that the airline would start the buyback process – the idea being that if a company reduces the amount of shares in circulation, the share price will rise.

But on Wednesday, the company said it would now focus on buying blocks of shares from current EU shareholders. The fear is that, in the event of a no-deal Brexit, EU rules could cause regulation problems if too many shares are held in non-EU countries.

In the event of a no-deal, EU rules state that there are restrictions on how shares in EU-based companies can be traded by non-EU countries, unless a deal is in place.

The European Securities and Markets Authority (Esma) and the Financial Conduct Authority in the UK have clashed in recent months over the rules.

Ryanair CEO Michael O’Leary

Esma had initially said trading in UK-EU dual-listed companies, such as Vodafone and BP, would not be allowed by EU-based banks and funds.

This was scrapped earlier this year, but discussions are still ongoing over how much buying and selling on London markets can take place by EU institutions.

Ryanair is dual-listed on the Ireland and London Stock Exchange, and bosses are worried that the rules could hit the business.

The airline said: “Any such block repurchases from UK holders of shares will, in the event of a no-deal or ‘hard’ Brexit, limit the proportionate number of shares held by or on behalf of non-EU shareholders and should therefore reduce the period that the resolutions announced by the Company on March 11 2019 would need to remain in place.”

It added that the amount the company will spend on the buyback remains unchanged.

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