Avation Share Discussion Threads

[sogoesit] 20/1/2020 11:41

Break-out.
Maybe it's those "green loans" wot done it ;-)!

[argylerich] 16/1/2020 09:06

Thanks Carcosa, I wonder at them being a tad over-efficient in possible news management!

[carcosa] 16/1/2020 08:26

Flybe rebranded as Virgin Connect which is on the Avation website

[argylerich] 15/1/2020 10:29

Strange, Flybe seems to have disappeared from their 'customers' page 🤣

[quepassa] 13/1/2020 07:43

Another regional airline and Avation customer on the verge of collapse.

"Regional airline FlyBe in frantic bid to stave off collapse" according to SkyNews this morning:-


hXXps://news.sky.com/story/regional-airline-flybe-in-frantic-bid-to-stave-off-collapse


Administrators, EY, have been put on standby.


ALL IMO. DYOR.
QP

[sogoesit] 06/1/2020 11:29

Some press comment (SharesMag):

"Shares in plane leasing company Avation (AVAP) have jumped 7.6% higher to 290p as it revealed it is considering plans to put itself up for sale.

The firm has announced it is undertaking a comprehensive review of the business, and will consider a number of strategic options as it looks to ‘maximise value for shareholders’.

Such options include potential M&A activity, an aircraft portfolio sale, and the potential sale of the company through a formal sale process.

The firm also disclosed that, at the time of the announcement today, it is in preliminary discussions with one interested party about a potential takeover of the company.

Analysis from research firm Davy has found that acquisitions within the leasing sector usually take place when a company has a price to book value between 0.8 and 1.4 times, depending on its growth prospects.

Avation has a price to book value of 0.9 times according to Stockopedia.

A small aircraft lessor with a £169m market cap, analysts at Davy said Avation has ‘quickly and profitably built an attractive fleet of young aircraft’.

They added, ‘The investment case, where further scaling would provide commercial and financing benefits, was not fairly reflected by valuation levels, in our view.

‘The commencement of a formal sale process is a step towards correcting this and we note that M&A in the space has historically happened above book value.’

Book value must be around 320p I deduce from above (anyone have Stockopedia?).
(MarketScreener has 2020(e) BV as 312p.)
1.20x book would make the sell-out at around 380p.

[cc2014] 06/1/2020 10:20

I guess the preliminary approach is a figure which the directors feel undervalues the business but are concerned the wider shareholder base would accept. Say somewhere between 300p and 325p

Or put another way. the directors have poured huge time and energy into AVAP and whilst they are happy to let it go for the right price they see the current offer or tentative negotiations or whatever derisory.

[quepassa] 06/1/2020 09:40

inviting other offers via an RNS is an unusual approach.

it also makes me guess that this preliminary approach is not particularly compelling.

but still don't understand why they haven't rejected the preliminary offer outright as they have recently said they wanted to grow and expand the business.

they couldn't have picked much worse timing with surging oil prices after the recent US actions in the Middle East.

Airline stocks have been tanking in the last few days....i guess weaker airline companies will start feel the impact of those oil price rises sooner rather than later.

all imo. dyor.
qp

[sammu] 06/1/2020 09:05

With the shares trading sideways for about a year there was maybe a bit of fat available. This would probably be attractive to private equity and so one approach brings the option of a not in public auction. The reference to selling assets etc may just be to highlight that they have options to highlight value in the business, to focus the mind of any bidders and the market. The board may also feel that this process, whatever the outcome, will lead to the best value being realised.

[igbertsponk] 06/1/2020 08:58

Suspect a decent offer has been made and management are inclined to accept and then go and set up a new company to do it all again.

[catsick] 06/1/2020 08:12

My guess would be the break up could be that it is a sale of the assets of the company rather than the company itself, another leasing company may just want the book of business, but I am just guessing.

[quepassa] 06/1/2020 07:59

in your view, what is that "very good reason" please as they have said repeatedly hitherto they wanted to grow the Company not break it up or sell it.

This is what they still today say about themselves on their website in the Company Profile section:

"Coinciding with the expected delivery of the ATR 72 and potential acquisitions of other aircraft, Avation will continue to grow in terms of the size and quality of its managed fleet and the financial returns it generates."

Nothing here about breaking the company up!

ALL IMO. DYOR.
QP

[catsick] 06/1/2020 07:54

Jeff has 11.6 million shares, he won't sell out for less than the company is worth and he will have a very good reason to do what he is doing here ...

[quepassa] 06/1/2020 07:45

It is ONLY a preliminary approach - with no figure given as to any price which may or may not have been tabled.

A preliminary approach from an un-named party does not in my experience normally cause management to look at breaking the company up by other means.

Approaches come and go, succeed and fail. So they are not just responding to that specific single situation but have put up a "For Sale/Break-up" sign over the whole Company, irrespective of what happens to that preliminary approach.

ALL IMO. DYOR.
QP

[basem1] 06/1/2020 07:40

Depends on how much skin in the game the board have They maybe think they've taken the business as far as they can

[argylerich] 06/1/2020 07:35

I thought that it was clear in the RNS, albeit further down, that an approach has led to this.

[catsick] 06/1/2020 07:34

Sounds to me like they have been approached with a bid and they want to turn it into an auction to get the best price, management own a lot of shares so they will not undersell, Jeff has been through this process before and will get the best price which I would guess should be in the 325-350p region, it will be a shame to see this one go as it compounds at a nice clip ....

[quepassa] 06/1/2020 07:24

whoa...

curious.

thing is...they don't really say why they are doing it at this point in time.

Just what is the real underlying reason pushing Avation to do this?

It also seems somewhat unexpected to me and at odds in my opinion with recent noises coming from Avation about growth and expansion in recent times.

They are effectively putting themselves up for sale by inviting "parties with a potential interest" to make contact.

In talks with one party but clearly examining all options including portfolio sale...


An outside approach is one thing. Breaking the company up is another thing.

Interesting one.



ALL IMO. DYOR.
QP

[sogoesit] 06/1/2020 07:14

Company for sale.

[sammu] 20/12/2019 08:58

Well found RH.

[ragehammer] 19/12/2019 09:22

It looks like both the ex Thomas Cook A321s are going to Vietjet.

hxxps://www.planespotters.net/airframe/airbus-a321-f-wtbh-avation-plc/r6kq7z

hxxps://www.planespotters.net/airframe/airbus-a321-f-wtbi-avation-plc/r1pno6

[russman] 29/11/2019 09:26

& Air Berlin was another AVAP client default.

[harrogate] 21/11/2019 11:20

I thought the actual content was fine and the TCG planes a massive plus. I am sure they should have released that as a separate announcement to get proper exposure. What I did sense was the language used being a bit more downbeat than normal for them. But the story is fully intact and there is scope for upgrades if they sell planes at a profit and take on new planes they are evaluating.