Avolon board chooses IPO over sale option

Irish-based aircraft leasing company Avolon expects its initial public offering to be priced at between $21 and $23 per common share.

At the top end of the expected price range, the Dublin-headquartered company will be valued at $1.86bn (€1.48bn) and the IPO will raise about $314m (€251m).

All of the 13.6m shares in the offering are being sold by selling shareholders, according to a regulatory filing made yesterday.

China’s AVIC Capital yesterday announced that it had cancelled a plan to acquire Avolon after the aircraft-leasing firm’s board and shareholders rejected the proposed price, confirming an earlier Reuters story.

In a brief stock exchange filing, AVIC Capital, a Chinese state-owned aerospace and defence company, did not specify its proposed price to take over Avolon or the counter proposal by the shareholders of the takeover target.

Sources told Reuters in October that the unsuccessful talks with AVIC Capital and China’s sovereign wealth fund CIC made an IPO the most realistic alternative for Avolon’s private equity owners to cash out on their investment.

It is not the first time that Chinese interest in an aircraft-leasing firm failed to produce a deal. A Chinese consortium made an unsuccessful bid in 2012 to buy aircraft lessor International Lease Finance Corp from US insurer American International Group (AIG). That proposal fell apart and AIG ended up selling ILFC to AerCap Holdings.