Kuwait-based airport services firm National Aviation Services (NAS) claimed on Thursday its roughly £469 million takeover approach for Edinburgh-based rival John Menzies plc “represents a compelling opportunity for shareholders to realise full value for their investment in cash.”

John Menzies has turned down what it called the “preliminary and unsolicited” takeover proposal from NAS, a unit of Kuwait-based Agility Public Warehousing Co, saying it undervalued the Scottish company.

Menzies said: “The board has carefully considered the proposal together with its financial advisers, Goldman Sachs International, and has unanimously rejected it, having concluded that the proposal is entirely opportunistic, conditional and that the terms fundamentally undervalue Menzies and its future prospects …”

On Thursday, NAS said its possible cash offer of £5.10 per share represents a premium of 76% to Menzies’ closing share price of £2.90 on February 2, 2022.

NAS must now announce a firm intention to make an offer for Menzies by March 9, 2022, or walk away.

“NAS and its advisors have considered publicly available information in detail, including Menzies’ performance before the pandemic, recent cost reduction measures, contract renewals and new business wins,” said NAS.

“In addition, NAS and its advisors have taken into account the company’s debt levels, debt service obligations and ability to generate free cash flows and distribute profits to its shareholders, particularly in light of the investments required to remain competitive and grow the business.

“NAS believes that its improved possible cash offer at 510 pence per share represents a compelling opportunity for shareholders to realise full value for their investment in cash.

“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 believes that a combination of both businesses would equip the combined entity with the scale and resources necessary to serve a broader customer base globally, and capitalise on growth opportunities as the aviation industry emerges from the pandemic.”

NAS CEO Hassan El-Houry said: “We have made an attractive offer that we urge Menzies’ shareholders to consider carefully.

“Our offer represents a 76% premium over Menzies’ share price just over a week ago. 

“In our view, the fundamentals of Menzies and of the industry as a whole are unlikely to change substantially, notwithstanding cost-cutting measures by Menzies.

“Let’s be clear: even as air travel recovers, airlines will look to contain costs with their airport service providers. 

“NAS is a disciplined investor with a proven track record of growth, even throughout the COVID-19 pandemic that has largely decimated the industry.

“We are one of the fastest growing and most successful airport services companies in emerging markets, with an experienced leadership team.”