Menzies consults shareholders on £469m offer

John Menzies plc, the Edinburgh-based aviation logistics giant, said it has engaged with its shareholders following its board’s unanimous rejection of the roughly £469 million cash takeover approach from Kuwait-based airport services firm National Aviation Services (NAS).

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.

Menzies claimed the NAS proposal is “opportunistic” and “conditional” and on terms that “fundamentally undervalue Menzies and its future prospects.”

The Edinburgh firm said the NAS proposal fails to take account of a “pipeline of higher margin opportunities that we believe will generate approximately £80 million of net new annualised revenue from commercial opportunities and approximately £150-200 million of new revenue over the short to medium term from several business development opportunities.”

NAS, a unit of Kuwait-based Agility Public Warehousing Co, has claimed its takeover approach for Menzies “represents a compelling opportunity for shareholders to realise full value for their investment in cash.”

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

In a stock exchange statement on Monday, Menzies said: “The board of Menzies has engaged with its shareholders following its announcement of the NAS proposal on 9 February 2022.

“As previously announced, the board of Menzies has unanimously rejected the NAS Proposal, having concluded that it is opportunistic, conditional and that the terms fundamentally undervalue Menzies and its future prospects.

“When adjusted for permanent cost savings of £25 million that the management team of Menzies has already delivered, the NAS Proposal implies a (pre-IFRS16) EV/EBITDA multiple of 6.4x, which is significantly lower than achieved in comparable transactions over the last decade in our sector for other assets of Menzies’ size and standing …

“The board believes the strong portfolio mix, positioning of Menzies and the ongoing execution of Menzies’ strategy will create significant value for shareholders in the near and medium term.

“The board will consider the best interests of Menzies’ shareholders and all actions to maximise shareholder value.”