John Menzies takeover bid intensifies
18 / 02 / 2022
By Roger Hailey
National Aviation Services (NAS) has stepped up the pressure on takeover target John Menzies.
NAS affiliate Agility Strategies Holding has entered into contracts to buy 13.2% of Menzies shares for 605 pence per share, higher than the original unsolicited bid.
On February 9, NAS’ 510 pence per share offer for John Menzies was rejected by the Scotland-based aviation services group which provides airfreight wholesale through Air Menzies International and ground handling through Menzies Aviation. This rejection prompted NAS to respond that it’s offer was “compelling.
Prior to this latest shares announcement, the board of Menzies had issued a further takeover rebuff to NAS.
The Menzies board said that the 510 pence proposal was “entirely opportunistic, conditional and that the terms fundamentally undervalue Menzies and its future prospects”.
NAS had earlier made an unsolicited approach regarding an all cash offer at 460 pence per Menzies share.
Under stock market rules any firm offer for Menzies, if made, will be at a price of not less than 605 pence per share.
NAS said in a statement: “Following discussions with a number of Menzies’ shareholders, NAS announces that Agility Strategies Holding Limited, an entity under common control with and acting in concert with NAS, has today [Thursday] entered into contracts to purchase 12,133,893 ordinary shares in Menzies, representing approximately 13.2% of the issued share capital of Menzies, at a price of 605 pence per share.”
An offer of 605 pence per Menzies share would, said NAS,represent a premium of approximately:
- 109% to Menzies’ closing share price of 290 pence per share on 2 February 2022 (the date on which NAS made its second proposal to the Board of Menzies); and
- 81% to Menzies’ closing share price of 335 pence per share on 8 February 2022 (the day before Menzies entered an offer period).
The statement added: “NAS continues to believes that the combination of the two businesses has a strong strategic and financial rationale. Menzies and NAS share highly complementary geographical footprints and product portfolios, with minimal overlap.
“NAS places importance on Menzies’ Scottish heritage, its enviable brand, and its long-standing operational excellence across the globe. A combination with NAS would bring greater geographical diversification to Menzies, forging deeper relationships with the combined customer base.
“NAS again requests the Board of Menzies to provide information access and dialogue with management.”
In response to the latest development, Menzies said: “The Board is confident in the execution of Menzies’ strategy and the significant potential value creation that this strategy will deliver in the near and medium term through the full impact of management actions, the return of underlying volumes to pre-pandemic levels and its pipeline of higher margin opportunities.
“Menzies is well positioned as a global player in a market with proven structural growth and will benefit from the continued recovery in flight and freight volumes.”
The Menzies board reaffirmed earlier statements that it will “consider the best interests of Menzies’ shareholders and all actions to maximise shareholder value”.
It added: “Shareholders are urged to take no action at this time.”
NAS chief executive Hassan El-Houry said: “The acquisition of this significant stake demonstrates our seriousness and belief that a combination of Menzies and NAS offers a compelling opportunity to all stakeholders.
“If we were to make an offer at 605 pence per share, it would represent a premium of 109% to Menzies’ share price just over two weeks ago.
“Once again we urge the Menzies board to engage with us so that we can put our compelling and deliverable offer to shareholders and secure Menzies’ future in a highly uncertain environment.”
Menzies has issued a further takeover rebuff to Agility subsidiary National Aviation Services (NAS), which last week launched a 510 pence per share bid for the Scotland-based wholesale airfreight and airport ground handling group.