Genesis Set to Launch on M&A News

• By the tickerspy.com Staff
• On 9:45 am EDT, Tuesday September 15, 2009

It looks like the airplane leasing sector could be the next to see consolidation.

Small-cap airplane leasing company Genesis Lease (NYSE: GLS - News) said that it is in talks about a merger or acquisition, according to the Associated Press. According to the report, Airfinance Journal said that AerCap Holdings (NYSE: AER - News) was expected to place a bid for the company in a deal that would value the consolidated companies at over $1 billion, the industry's largest. The AP, couldn't reach the company for comment, and Genesis did not disclose the potential partner. In any case, investors are bidding up Genesis shares by 12% ahead of an expected merger.

Prior to Tuesday's open, the Airplane Leasing Stocks Index was ahead of the S&P 500 by 3.2% over the last month. Genesis Lease shares have shot up by 32% for the period, adding more than 16% in the last five sessions.

AerCap is the sector's most popular stock among professional investors. At the end of the second quarter four Pros counted the stock among their top-15 U.S.-listed holdings.

Should AerCap and Genesis combine businesses, Aircastle (NYSE: AYR - News) and BabCock & Brown Air Limited (NYSE: FLY - News) would remain as the sector's only other U.S.-listed companies. A combination of the latter two would put the consolidated company in the same weight-class as the suggested AerCap-Genesis merger, but for the time being, Genesis' acknowledgment of a potential deal with an unnamed partner is all investors can bet on.

As the story unfolds, investors can look to the Airplane Leasing Stocks Index to track the sector's response to M&A activity, or a lack there of if a deal falls through. As of this writing, the Airplane Leasing Stocks Index is one of the top-100 performing tickerspy Indexes over the last month, up by 7.7%.

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