In its announcement, AIG said that it had cancelled an agreement with Jumbo Acquisition Limited for a sale of up to 90% of ILFC. Another potential buyer had turned up last December, a consortium of Chinese financial service firms that had offered to pay $4.23 billion for about 80% of ILFC, but the deal was never completed.
When AIG filed for an ILFC IPO, the insurance company was expected to sell about 20% of the leasing unit, valuing ILFC at between $8 billion and $10 billion, according to a report in the Wall Street Journal. Proceeds would have gone to repaying the $68 billion in bailout funds AIG received following the financial crisis of 2008.
The federal government’s remaining stake in AIG was sold last December, and the bailout deal showed a net positive return of nearly $23 billion to U.S. taxpayers.
AerCap’s largest shareholder, Abu Dhabi-based Waha Capital, has agreed to vote its 26% stake in favor of the acquisition. After the transaction closes, AIG will have the right to nominate two members of AerCap’s board, and AIG has agreed to provide a five-year $1 billion revolving credit facility to the combined company.
AerCap currently has about 113.72 million shares outstanding, and AIG will have a stake of about 46% in the combined company when the transaction closes.
AIG stock was up about 1.5% in premarket trading Monday, at $50.14 in a 52-week range of $34.22 to $53.33.
AerCap’s shares were trading up about 6.3% at $26.49, well above the 52-week range of $13.37 to $24.93.
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