Shares of Edinburgh-based aviation logistics giant John Menzies plc soared about 25% on Thursday to around £5.84 after Kuwait-based airport services firm National Aviation Services (NAS) said it “entered into contracts” to buy a 13.2% stake in Menzies at a big premium price of £6.05 per share for a total of £73.4 million.
John Menzies’ board last week unanimously rejected a roughly £469 million cash takeover approach from NAS pitched at £5.10 per share, a price that represented a premium of 76% to Menzies’ closing share price of £2.90 on February 2, 2022.
NAS is unit of Kuwait-based Agility Public Warehousing Co.
“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 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,” said NAS in a stock exchange statement.
“Consequently, any firm offer for Menzies in accordance with Rule 2.7 of the Code, if made, will be at a price of not less than 605 pence per share.
“An offer of 605 pence per Menzies share would, if made, 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) …
“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. “
NAS CEO 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.”
NAS must now announce a firm intention to make an offer for Menzies by March 9, 2022, or walk away.
John Menzies said in a stock exchange statement: “The board of Menzies notes the announcement by NAS that Agility Strategies Holding Limited has 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 and, as a result, any firm offer for Menzies will be at a price of not less than 605 pence per share.
“The board has not received a further proposal from NAS.
“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.
“As announced on 15 February 2022, the board will consider the best interests of Menzies’ shareholders and all actions to maximise shareholder value.
“There can be no certainty that any firm offer for Menzies will be made nor as to the terms on which any firm offer may be made.
“A further announcement will be made in due course. Shareholders are urged to take no action at this time.”