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Bohai Leasing Agrees to Acquire Avolon

September 04, 2015, 07:41 AM
Filed Under: Aircraft

Avolon, the international aircraft leasing company, announced it has entered into a definitive merger agreement to be acquired by Bohai Leasing Co., Ltd. at a price of US$31 cash per common share. Under the terms of the Transaction, which has been unanimously approved by Avolon’s Board of Directors, all Avolon shareholders will receive US$31 in cash for each Avolon common share they hold, in a transaction with a total enterprise value of approximately US$7.6 billion.

US$31 per share represents a 31% premium to Avolon’s undisturbed closing price on July 13, 2015 of US$23.73 per share, the closing price prior to the announcement of Bohai’s initial intention to acquire a 20% stake in Avolon. US$31 per share also represents a 55% premium to Avolon’s initial public offering at US$20 per share in December 2014.
The agreed price in the Merger Agreement of US$31 per share, as against an indicative offer price of US$32 per share described in Avolon’s press release dated August 10, 2015, reflects significant volatility across global equity markets. To provide greater certainty of value and reflecting its commitment to the Transaction, Bohai will increase its deposit by US$100 million to a total of US$350 million. Bohai has already paid a deposit of US$75 million. A further US$200 million will be paid on September 4, 2015 and the final US$75 million will be paid by September 15, 2015. The total US$350 million deposit represents approximately US$4.25 per Avolon common share and is payable to Avolon in certain circumstances if the Transaction is not consummated.

The Transaction is expected to close by the first quarter of 2016.

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