It was a 'double dose' of exciting news for shareholders in Australia's pre-eminent investment bank Macquarie Group Ltd (ASX: MQG) yesterday.
Firstly, Macquarie enter a trading halt after announcing the proposed acquisition of an aircraft operating lease portfolio from AWAS Aviation Capital for a massive US$4 billion.
It's an exciting acquisition and will see Macquarie taking control of "90 modern, current-generation commercial passenger aircraft leased to 40 airlines." Importantly, the capital requirement of the transaction only requires $600 million which will help the purchase provide an expected boost of 5% to earnings per share in the first full year of ownership.
To partially fund its capital requirements for the purchase, the group set to work undertaking a $500 million capital raising (hence the trading halt) to institutions along with announcing a share purchase plan for eligible shareholders.
The second piece of exciting news for shareholders was a report in the Australian Financial Review (AFR) that broking house UBS has revised up its price target for Macquarie's shares. According to the AFR, UBS just increased its target price from $64 to $79 a share.
Not only is that a significant re-rating but it also came prior to Macquarie's announcement regarding the US$4 billion aircraft leasing acquisition which could provide an impetus for UBS to further revise the stock's price target higher!
Shares in Macquarie have already gained 30.7% in the last 12 months, a result which absolutely blitzes the 9.3% return from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). Despite the significant outperformance achieved already, if UBS's call is accurate there could be further outperformance ahead for shareholders.