In a deal valuing its equity at just over $2.5 billion, the bidding battle for Avolon, the Dublin-based aircraft leasing company, was won over by Bohai Leasing, a unit of the Chinese aviation and shipping company HNA, reports the Financial Times.
Bohai Leasing defeated AVIC Capital, a subsidiary of state-owned Aviation Industry Corp of China, which had been in talks with US-listed Avolon for over a year.
In recent times, Japan’s Mitsubishi Corp and Hong Kong-based billionaire Li Ka-shing have invested huge amounts in aircraft leasing which is attracting growing attention and dollars in Asia.
The privately owned company Bohai is a subsidiary of HNA which has activities and interests in focuses on aircraft, shipping and tourism. Bohai is listed in Shenzhen.
Avolon managed to get more out of the deal for itself after the company, noted to be one of the world’s fastest-growing aircraft leasing businesses, reported a better than expected second quarter in August. The company recorded a net income of $55.6m for the three months to the end of June 30, which was 133 per cent more when compared to the same time last year. Revenue rose 38 per cent to $183.9m.
With an offer of $31 a share, Bohai managed to secured the deal with Avolon on Friday. This offer by Bohai was $1 a share below its previous offer and a 31 per cent premium to the undisturbed share price on July 13.
The total value of the enterprise including debts stands at $7.6 billion.
The deal was finally approved by the board of Avolon on Friday and the entire process is expected to be completed in the first quarter of 2016.
The deal that was well fought out between bidders brought in good rewards for the investors of Avolon. The list of investors include private equity groups Cinven, CVC and Oak Hill. The shares of Avolon were listed at $20 a share in December 2014.
After an informal rival offer emerged, the initial offer from Bohai which was of $26 a share for a 20 per cent stake in July had to be raised by the bidder to $32 a share of Avolon. This proved to a boon for the investors having holding shares in the Dublin based aircraft leasing company. The challenger to Bohai is believed to have been AVIC Capital, a subsidiary of Aviation Industry Corp of China.
The final price of the share which was fixed at $30 per share were reflective of the volatility across global equity markets, according to communiqués by both the companies.
“To provide greater certainty of value and reflecting its commitment to the transaction, Bohai had agreed to raise its break fee by $100m to $350m,” the companies were quoted to have said by Financial Times.
“Bohai would bring profile and China relationships to the group. The China market offers “one of the most compelling growth opportunities in global aviation over the next two decades,” said Denis Nayden, Chairman of Avolon.
(source:www.ft.com)
Bohai Leasing defeated AVIC Capital, a subsidiary of state-owned Aviation Industry Corp of China, which had been in talks with US-listed Avolon for over a year.
In recent times, Japan’s Mitsubishi Corp and Hong Kong-based billionaire Li Ka-shing have invested huge amounts in aircraft leasing which is attracting growing attention and dollars in Asia.
The privately owned company Bohai is a subsidiary of HNA which has activities and interests in focuses on aircraft, shipping and tourism. Bohai is listed in Shenzhen.
Avolon managed to get more out of the deal for itself after the company, noted to be one of the world’s fastest-growing aircraft leasing businesses, reported a better than expected second quarter in August. The company recorded a net income of $55.6m for the three months to the end of June 30, which was 133 per cent more when compared to the same time last year. Revenue rose 38 per cent to $183.9m.
With an offer of $31 a share, Bohai managed to secured the deal with Avolon on Friday. This offer by Bohai was $1 a share below its previous offer and a 31 per cent premium to the undisturbed share price on July 13.
The total value of the enterprise including debts stands at $7.6 billion.
The deal was finally approved by the board of Avolon on Friday and the entire process is expected to be completed in the first quarter of 2016.
The deal that was well fought out between bidders brought in good rewards for the investors of Avolon. The list of investors include private equity groups Cinven, CVC and Oak Hill. The shares of Avolon were listed at $20 a share in December 2014.
After an informal rival offer emerged, the initial offer from Bohai which was of $26 a share for a 20 per cent stake in July had to be raised by the bidder to $32 a share of Avolon. This proved to a boon for the investors having holding shares in the Dublin based aircraft leasing company. The challenger to Bohai is believed to have been AVIC Capital, a subsidiary of Aviation Industry Corp of China.
The final price of the share which was fixed at $30 per share were reflective of the volatility across global equity markets, according to communiqués by both the companies.
“To provide greater certainty of value and reflecting its commitment to the transaction, Bohai had agreed to raise its break fee by $100m to $350m,” the companies were quoted to have said by Financial Times.
“Bohai would bring profile and China relationships to the group. The China market offers “one of the most compelling growth opportunities in global aviation over the next two decades,” said Denis Nayden, Chairman of Avolon.
(source:www.ft.com)