Newspaper says aircraft options make Ryanair bid target
25.04.08
The Irish Independent says that recent falls in the share price of Ryanair combined with the 'hidden value in a growing fleet' could make it a tempting bid target for anybody who can raise the funds.
Europe's biggest budget airline has seen its stock fall by 60 percent in the last 12 months, meaning one of the world's most profitable airlines is now valued at just €3.8bn (£3bn).
The newspaper says that Investors are wary of its lack of protection against record oil prices - and this caused two brokers to downgrade its shares today - but it identifies two factors set the budget airline apart from many rivals.
Ryanair has orders and options to buy dozens of Boeing planes over the next 4 years at prices so far below the going rate. The Independent reveals that the difference in value alone could net any buyer €2.3bn - €2.6bn. analysts also estimate that the 115 737-800s it already owns are worth €445m more than is reflected on its balance sheet.
In addition, a highly profitable Ryanair armed with a cash pile of more than €2bn is well placed to emerge bigger and stronger from the increasingly inhospitable swamp that has seen several smaller US airlines come unstuck.
However, Penelope Butcher, analyst at Morgan Stanley, told the newspaper that any approach to buy the airline looked a ‘distant possibility’ at the moment, as the credit crisis had made it so difficult to raise funds. She named private equity group TPG - founding partner David Bonderman is Ryanair's chairman - and Iceland's FL Group as possible suitors.
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