Insurer American International Group made a complete break from aircraft leasing by selling its remaining 5.4% stake in Netherlands-based lessor AerCap Holdings through a US$500m share sale overnight Tuesday.
Citigroup and Goldman Sachs are leading the overnight sale of 10.7m shares against Tuesday’s close of US$48.01.
Notably, this is below the US$49.00 price at which AIG disposed of 71.2m AerCap shares or 40.5% of the company in June, a sale that included an additional US$750m share repurchase by AerCap to help soak up supply.
It is no coincidence that the 10.7m shares being offloaded is equivalent to 15% of the shares sold in June. This stake would have been sold then if the underwriters were able to exercise the greenshoe. AerCap’s poor aftermarket performance meant that was not possible but AerCap’s uninspired share price performance in that period hasn’t precluded AIG from returning now once a 60-day lock-up expired to offload the stub at a lower mark.
The latest sale follows some positive analyst reviews of AerCap, including Bank of America Merrill Lynch’s move last week to increase its AerCap price objective to US$56 a share from US$50 due to modelling changes following the company’s second quarter earnings.
AIG received its stake in AerCap when the lessor bought ILFC after a protracted sales effort. Yet the insurer ironically benefited from the protracted disposal.
AIG had filed to take ILFC public in early 2011 in hopes of achieving a US$7bn–$10bn valuation.
Two years later it agreed to sell for US$5.3bn to a Chinese consortium, only to see that deal fall through. AerCap’s offer of 97.56m shares and US$3bn in cash in December 2013 was worth US$5.4bn at the time, but now will have netted proceeds of more than US$8bn including this offering.
