RYANAIR SHAREHOLDERS SEEK ANSWERS ON AER LINGUS - Shareholders are pressing Ryanair on whether or not it plans to sell its €400 million Aer Lingus stake to IAG, which this week launched a formal offer for the Irish flag carrier.
The news comes as IAG begins seeking the EU competition authority’s approval for its its almost €1.4 billion bid for Aer Lingus. Ryanair chief executive Michael O’Leary and his colleagues are meeting investors in Europe and north America after the company published results showing profits grew by 66% to €867 million in the 12 months to March 31. It is understood that institutional shareholders have been pressing them on the likely response to IAG, whose €2.55-a-share offer for Aer Lingus values Ryanair’s 29.8% stake at €410 million, writes the Irish Times. Those backers are thought likely to favour a sale. The price allows the company recover the money it spent buying the 160 million Aer Lingus shares in the first place. If the IAG offer were to fail for any reason, it would leave Ryanair facing the prospect of being forced by the UK Competition and Markets’ Authority to sell most of its holding for far less than the current offer. According to their most recent annual reports, Ryanair and IAG have three large shareholders in common. US-based Capital Research and Management, Ryanair’s biggest investor with 16.6%, owns 5% of IAG. Standard Life, IAG’s second-biggest backer with just over 5%, holds 3.2% of Ryanair. Blackrock owns around 5% of both.
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EMILY O'REILLY DEMANDS ANSWERS FROM ECB ON MARKET SPEECH - The European Central Bank has been taken to task by European Ombudsman Emily O'Reilly after one of its most senior officials disclosed market moving information to a select group of money managers at an event in London earlier this month. The ECB has already accepted that an error occurred in relation to a speech by its executive board member Benoit Coeuré at an event in London on May 15, when he revealed the ECB could step up its bond-buying programme in May and June, says the Irish Independent. The speech was delivered to an audience of around 100 including hedge fund managers and investment bankers at a dinner that followed an event at the five-star Berkeley Hotel in London. The speech was only circulated to the media and the rest of the market the following morning, putting those who heard it first hand at a potential advantage. The contents of the speech are credited with big swings in bond, share and currency markets on May 18. Normally, such speeches are published at the same time as they are delivered, often after being circulated in advance to the media. It didn't happen last week due to an internal error, the ECB has said. However, Emily O'Reilly, the former Irish Ombudsman who is now based in Strasbourg, has asked for further information.
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REGULATORY RESTRICTIONS 'STIFLE' CREDIT UNION GROWTH - The credit union sector is overburdened with regulatory restrictions and limitations, which is stifling its growth potential. That is according to Fianna Fáil finance spokesman Michael McGrath, who was commenting on new figures showing that there are 189 credit unions operating with lending restrictions with fewer than 10%, or only 18, allowed to lend €40,000 and more. “The sector can only thrive if it is able to issue new loans. In too many instances, the ability of credit unions to do just that is being unnecessarily constrained. The manner in which legislative changes have been implemented has disadvantaged credit unions and given a competitive advantage to the banking sector, Mr McGrath said. "There is the potential for further relative weakening of credit unions from the current consultation process under way by the Central Bank. This is contrary to the interests of consumers, particularly those who have limited access to lending facilities from banks," he added. The Irish Examiner said that Mr McGrath was commenting after Finance Minister Michael Noonan confirmed in a written Dáil response that it has cost over €31m to bail out three credit unions.
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WALL STREET'S GORILLA BEATS HIS CHEST AGAIN, TO BLAME LEHMAN'S DEMISE ON WASHINGTON - Dick Fuld, who presided over the implosion of Lehman Brothers, used his first voluntary public appearance since 2008 to blame Washington for fuelling the financial crisis and ordering the investment bank’s closure, reports the Financial Times. “Wow, I haven’t done this for a while,” Mr Fuld said. “This is my first public event since 08. I don’t include my wonderful time with Congress,” he added, referring to his post-crisis grillings on Capitol Hill. Mr Fuld, who was known in his Wall Street heyday as the Gorilla because of his aggressive attitude, chose a relatively low-profile venue for his public comeback - the Marcum Microcap conference in New York where small companies were looking for investors. But even there, almost seven years since the bank’s collapse, there was still ill-will towards the Lehman boss, particularly from employees - some of whom saw their life savings wiped out in the biggest bankruptcy in US history. “I have a few words I’d like to say to him,” said Brian Choi, a former Lehman employee who is now vice-president at Woerner Holdings, an investment firm. “You screwed so many.” Mr Fuld showed no sign of contrition over the demise of the bank, which he led from 1994. The crisis was “a perfect storm,” he said, “but it starts with the government.” It paved the way for unsuitable borrowers to buy homes, caused an interest rate shock, and then unfairly “mandated” the bankruptcy of Lehman while saving competitors.
