Fly Leasing Floats a Tender Offer

fly leasingFly Leasing (FLY) joined the friendly skies of companies making a tender offer. The aircraft leasing company has offered to purchase $75 million of its stock at a price between $12.70 and $14.25 per share. That’s good for around 13%-14% of the company’s common stock. With the stock now at $13.51, there’s no chance for a risk-free profit, however. But there does remain a little bit of head room on the top end of the offer. The stock jumped quickly on the day of the announcement, but the tender offer does have my favorite provision for small shareholders, the odd lot priority.

That is, there is an odd lot priority for up to 99 shares, so investors could take a flyer on the stock and hope that they can make a quick seventy-five dollars or so, by putting in an ask price at the maximum of $14.25. However, they risk not selling their shares in the offer. That’s not really my style, and I’d prefer something that was nearly risk-free, as in a traditional tender offer at a fixed price. (In fact, I’ve found a “take private” situation that offers investors approximately $750 in profit over the next two weeks with limited downside. Just enter your email in the box of the top of the page and I’ll send you a special free report on it.)

No directors or officers of the company are participating in the tender offer, and that’s generally a good sign for the long-term outlook on the business. Of course, a tender offer itself is usually a good sign that management is looking to create shareholder value. And this tender offer is part of a previously announced $100 million repurchase authorization, so over the next 12 months the company has a remaining authorization of about $25 million. Additionally, large shareholders Summit Aviation Partners and Onex Corporation will not be tendering any shares in the offer. In fact, following the offer Summit will buy $2 million of Fly Leasing stock, and Onex will add about $8 million to its portfolio. The increased stake looks like a positive sign.

Fly Leasing will pay for the tender offer with cash on hand. It should have no problem affording the purchase even if the maximum number of shares were tendered. The offer expires on December 16, 2015 unless extended. You can read further details at this SEC filing, and you can see all the recent tender offers on this page.

Tender offers are great, low-risk money, but they are pretty rare, usually just 2-3 per year are actionable. Fortunately right now, (until early December) we have an excellent “take private” in process that can earn you several hundred dollars (nearly $750, as of November 1). Sign up for our special free report in the lower right pop-up box or the bar at the top of the screen. I’ll send you a special free report with all the details.

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