Genesis Lease Confirms M&A Discussions
The deal would still be way below the $14 book value of GLS, but Stone Fox Capital has argued that since AER also trades at a similar BV discount it'd be advantageous for GLS shareholders to take the 40% bump and then participate in any AER rally. A rally likely to be quicker with the attention such a deal would bring. In addition, we suggested just less then a month ago that AER was the best investment in the airplane leasing sector: AirCap Leads the Airplane Leasing Sector.
Guess we'll see if the deal actually gets done. GLS is trading up 12% in after hours action. Anybody interested in how a similar deal worked out should check out the Tween Brands (TWB) takeover. Most investors suggested that TWB wasn't getting enough value in the deal with Dressbarn (DBRN). Marybe/maybe not but the stock has gone from trading at $5 before the deal to $6.75 the day off to over $8 now. And in that scenario, shareholders were more diluted with less potential for realizing the growth potential of TWB. In this case, I don't see the potential as diminished and hence would keep my stock and let it roll into AER tax free.
As usual, only invest because you think GLS is a huge value trading below book value and not because of a potential merger.