Avolon enters exclusive talks for $2.6bn takeover

Avolon, the Irish aircraft leasing giant operated by Dómhnal Slattery, has entered exclusive talks which could likely see it bought out in the next few weeks for $2.6bn (€2.37bn).

The proposed deal means that the firm is now valued at $1bn more than it was only eight months ago when it sold shares on the New York Stock Exchange in an IPO at $20 a share.

Yesterday, it said it had entered exclusive talks with China’s Bohai Leasing which may lead to it being bought out at an increased price of $32 a share. It set a deadline of September 7 for the talks to end successfully.

Avolon carries about $5bn in debt and the takeover offer gives an enterprise value of $7.6bn. At the time of the IPO last December, Avolon had an enterprise value of $6bn.

Some of the biggest winners from the deal are Mr Slattery and his fellow executives.

Mr Slattery owns a stake of about 1.36% and is in line to receive over €32m if the deal is completed.

Other executives, including chief commercial officer John Higgins, chief financial officer Andy Cronin, and chief operating officer Tom Ashe, will also make millions of euro from their shareholdings if the takeover is successful.

Most of Avolon’s 63 staff are based in Ballsbridge in Dublin. It has 260 aircraft around the world.

Chinese lessors, which are mostly backed by state-owned banks, have been expanding in recent years as large carriers such as Hainan Airlines, Air China, China Eastern Airlines, and China Southern Airlines add more routes at home and overseas.

Bohai, a unit of aviation and shipping conglomerate HNA Group, bid for all of Avolon after learning there was another bidder, having originally offered to buy 20% of the company for $429m at $26 per share.

Ahead of Avolon’s flotation, China Investment Corp and AVIC Capital had been in talks to acquire the company.

The offer includes a break fee of up to $250m in the event that the deal does not go ahead under certain circumstances, with an initial $75m deposited by Bohai as a “good faith” measure.

Additional reporting Gordon Deegan and Reuters


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