Tuesday 12 December 2017

Avolon takeover battle: Domhnal Slattery's aircraft leasing firm valued at €2.3bn as two firms vie for control

Aviation entrepreneur Domhnal Slattery.
Aviation entrepreneur Domhnal Slattery.
John Mulligan

John Mulligan

Avolon, the Dublin-based aircraft leasing firm that was co-founded by Clare entrepreneur Domhnal Slattery, is being targeted in two separate takeover offers, valuing it at $2.55bn (€2.3bn).

Earlier this month, Avolon agreed to sell a 20pc stake in the company to Bohai Leasing for $429m. It had agreed to pay $26 per share.

That planned sale came just seven months after Dublin-headquartered Avolon floated on the New York Stock Exchange. The shares were being sold by existing private equity investors in Avolon.

In a statement just issued, Avolon said: “Avolon has also received a non-binding unsolicited offer from an independent third party to acquire 100pc of the issued and outstanding common shares of Avolon at a price of $30 per share.”

“As required by the terms of the Agreement, Avolon informed Bohai of the unsolicited offer,” it added. “ After Avolon informed Bohai of this offer, Bohai submitted a non-binding offer to acquire 100pc of the issued and outstanding common shares of Avolon at a price of $31 per share.”

Bohai’s offer values Avolon at $2.55bn.

That represents a 55pc increase over its valuation when it floated on the New York Stock Exchange last December.

“Avolon’s board of directors has not accepted or rejected either offer and continues to carefully evaluate these offers with its financial and legal advisors and has authorized its financial advisors to continue negotiations with both offerors regarding their respective offers,” the aircraft leasing firm said in a statement.

Avolon also remains subject to its original agreement with Bohai.

Co-founded by Mr Slattery, Avolon chief financial officer Andy Cronin and chief commercial officer John Higgins in 2010, Avolon has a fleet of 153 owned and managed aircraft, with another 107 on order from Boeing and Airbus.

Its airline clients include China Airlines, AeroMexico, KLM and Japan Airlines.

Since its foundation, Avolon has secured more than $7bn in backing from private equity firms and banks, including Cinven and CVC, and Oak Hill Capital Partners. Venture capital and private equity firms currently own about 37pc of Avolon.

Mr Slattery made millions over a decade ago selling a previous aircraft leasing firm.

Bohai Leasing, listed on the Shenzhen Stock Exchange, is majority-controlled by the Chinese state-owned HNA Group. HNA has major interests in aviation, tourism, retail and finance sectors.

 

 

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