The deal is worth 5.4B as of Fridays closing price of AER at 24.93. Based on 24.93 times 97.6M shares, the AIG's AER stock was worth $2.4B.
AER stock is up to $34 in pre-market. Assuming that value holds, AIG's AER stock is now worth $3.3B.
As such if the pre-market AER price holds and proves to be the new baseline, then we have a $6.3B deal.
I don't like the dilution afforded by the issuance of 100M shares. Yes that's 900 M gain to AIG. not AER
ILFC's book value has to be over $11B, so its a small price to pay. AIG has no reason to sell the shares soon - they want to make money too! Its a win-win. Biggest winners are AER stockholders.
Sentiment: Strong Buy
It will bring AER about 4.00 per share in earnings by the end of 2015. This is accreative
Yes we will have to see whether the premarket price holds but it is looking like a very merry Christmas for all the longs today.
AIG was willing to dump a pretty damn profitable company cheaply, just because it is non-core to its insurance business. The combined company is worth way more than $3.3B. AEC STOLE this - not from AIG, but from the whole industry. Brilliant move.