Fly Leasing (FLY) – Expected Dutch Tender Offer

This is a possibility to start position before the tender offer details are revealed.

Fly Leasing announced last week, that the company will start Dutch tender offer for $75m. No further details on pricing or timing have been announced yet (expected early this week).

From historical experience, these Dutch tenders tend to have odd-lot provision and quite often price jumps upon pricing announcement (quite often arbitrage disappears after trading announcement.. Keeping in mind that FLY is currently trading at 12-month lows, the dutch tender is likely to be carried out above the current prices.

Extracts from conference call:

“Finally, today we are announcing that our Board has approved a $100-million share repurchase program to replace our dividend. This new and significant repurchase program, which will be launched next week, will involve a $75-million modified Dutch tender offer, and a $25-million, open-market share repurchase program. These programs will replace both FLY’s previously announced share repurchase program, under which we have spent the $5.5 million referred to earlier, and our current dividend.”

The follow-up would be when do we see the terms of the Dutch tender?”

Yes, on the latter question, you’ll see the terms early next week. We are working on legal documents now.”