AAR Corp (AIR) – Odd Lot Tender Offer – $87 potential

Current Price – $31.12

Offer Price – $29 - $32

Upside – 3% or $87 (for odd lot holders if upper pricing limit is used)

Expiration date –  22 May 2015

SEC Filling

 

Summary:

 AAR CORP., a Delaware corporation, is offering to purchase for cash by means of a "modified Dutch auction" shares of its common stock, pursuant to (i) auction tenders at prices specified by the tendering stockholders of not less than $29.00 nor greater than $32.00 per share.

Assuming that the Offer is fully subscribed, the maximum of 4,655,172 shares that the Company is offering to purchase under the Offer represents approximately 11.7% of the total number of shares outstanding as of April 22, 2015. Assuming the Offer is fully subscribed, the minimum of 4,218,750 shares that the Company is offering to purchase under the Offer represents approximately 10.6% of the total number of shares outstanding as of April 22, 2015.

 

No proration for Odd Lot holders:

First, all shares owned in “odd lots” (less than 100 shares) all of which have been validly tendered at or below the Purchase Price 

 

Source of Funds:

 The Offer is not subject to any financing condition. Assuming the Offer is fully subscribed, we expect the aggregate purchase price for the shares, together with all related fees and expenses, to be approximately $136.1 million. On March 26, 2015, we completed the sale of our former Telair Cargo Group for $725 million, which will generate net cash proceeds, after cash taxes and expenses, of approximately $600 million. We expect to use a portion of the sale proceeds to redeem our $325 million of Senior Notes and have sent the holders of the Senior Notes a notice of redemption. The redemption price for the Senior Notes will include an approximately $45 million make-whole premium. We expect to fund the share repurchases under the Offer using cash on hand, including a portion of the balance of the cash proceeds we received from the sale of our former Telair Cargo Group.