Bohai Leasing agrees to acquire Avolon for US$31 cash per share

Avolon, the international aircraft leasing company, has entered into a definitive merger agreement (the “Merger Agreement”) to be acquired by Bohai Leasing, at a price of US$31 cash per common share (the Transaction). 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$7.6bn. US$31 per share represents a 31% premium to Avolon’s undisturbed closing price on July 13th, 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 10th, 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$100m to a total of US$350m. Bohai has already paid a deposit of US$75m. A further US$200m will be paid on September 4th, 2015 and the final US$75m will be paid by September 15, 2015. The total US$350 m deposit represents approximately US$4.25 per Avolon common share and is payable to Avolon in certain circumstances if the Transaction is not consummated.