CHICAGO (Dow Jones)--Shares of aircraft leasing company Genesis Lease Limited (GLS), rose higher Tuesday, trading recently at $8.40, up 60 cents, or 7.5%, after the company confirmed it was in merger talks with an unnamed partner.
The Shannon, Ireland, company made a statement Monday following a trade journal report that AerCap Holdings NV (AER) was expected to make an offer for Genesis on Wednesday.
Genesis shares rose more than 8% Monday following the company's announcement.
Genesis and AerCap declined to comment on the report in Airfinance Journal.
AerCap shares traded recently at $8.81, off 29 cents, or 3.19%.
The pending offer for the relatively small Irish lessor comes as the aircraft leasing industry copes with falling demand for large commercial aircraft and a tight market for aircraft financing.
Financially troubled American International Group (AIG) recently decided not to sell all of its International Lease Finance Corp. unit, one of the two largest global aircraft lessors, saying it couldn't find a worthy buyer.
CIT Group Inc. (CIT) has had a similar experience with putting its leasing operation on the market.
Industry watchers said Tuesday that a deal between AerCap and Genesis makes sense. Since both companies are in good financial condition, the move would form a larger company with more industry clout.
At the end of 2008, Genesis had 54 aircraft in its portfolio, while AerCap reported 160 aircraft and 71 aircraft engines.
Both companies have said that, given the relative young age of their fleets, they have had no trouble placing leased aircraft with airlines around the world. The market for older aircraft has weakened substantially during the recent recession, with many airlines parking old planes that cost too much to operate.
-By Ann Keeton; Dow Jones Newswires; 312-750-4120; ann.keeton@dowjones.com |
