The UK’s Takeover Panel has extended the deadline by which Kuwait-based National Aviation Services (NAS) must make a firm takeover offer for Edinburgh-based aviation logistics giant John Menzies plc or walk away.
The news on the deadline extension came as John Menzies published results for the year ended December 31, 2021, showing its revenue rose 27% to $1.35 billion and it made a profit before tax of $30 million compared to a loss of $155 million a year earlier.
NAS — a unit of Kuwait-based Agility Public Warehousing Co — originally had until March 9 to make a firm offer for Menzies, but the panel has now agreed a new deadline of March 30.
“This deadline may be further extended with the consent of the panel, at Menzies’ request …” said the Edinburgh firm.
“There can be no certainty that any firm offer will be made.”
The board of Menzies said on February 21 it “would be willing unanimously to recommend” a final cash takeover offer of £6.08 per share worth roughly £559 million from NAS.
Menzies shares were trading around £2.90 on February 2, the date on which NAS made its second takeover proposal to the Menzies board.
Menzies shares fell about 3% on Tuesday to around £4.92 to give the firm a current stock market value of about £453 million.
According to Menzies’ website, Agility has already acquired an 18.97% shareholding in the Edinburgh firm.
In its results, Menzies said in its outlook: “We anticipate that our air cargo business line will continue to grow reflecting ongoing, strong demand for fast and flexible logistics solutions for moving freight worldwide.
“In addition, we expect that the steady increase in passenger flight volumes will continue and that this trend will accelerate as we progress through 2022.
“This recovery will extend beyond 2022 as air travel activity volumes are not expected to return fully to the levels that we saw pre-pandemic until 2024.
“This continued recovery would support further growth in revenues for our fuelling and ground services businesses into the medium-term.
“We are anticipating that the commercial progress that we have seen since the start of the pandemic will continue.
“Since the year end, we have seen this momentum continue, with the renewal and expansion of a five-year contract to provide into-plane fuelling and fuel farm services for Shell in the UK and gaining a five-year cargo contract with Geodis at Amsterdam.
“Our pipeline of opportunities is full.
“In 2022, we are targeting to generate approximately $100m of net new annualised revenue, and several business development opportunities that would deliver approximately $200-275m of new revenue over the short- to medium-term.
“As passenger flights steadily return, the resilience of our restructured cost base and reshaped business portfolio should enable the group to generate improved operating margins from growth in fuel and ground services revenue that would fully offset the impact of lower levels of governmental support for Menzies and the wider aviation industry.
“The group is on track to maintain significant liquidity headroom throughout the year ahead.
“Our strong underlying cash generation, the robustness of the air cargo business and steadily improving flight volumes will provide Menzies with the capability to invest in support of our commercial and business development objectives, and to reduce leverage.
“Menzies has successfully navigated through an unprecedented period for the aviation industry, and as the industry and the group emerge from the pandemic, the board believes that we are well positioned to take advantage of the significant opportunities ahead as the aviation industry continues to recover.
“The board believes that the group will benefit from the decisive management actions taken over the last two years, and that Menzies will be able to capitalise on a broad range of commercial, investment and growth opportunities that are available to the group.
“The board’s confidence about Menzies’ long-term operational, commercial and financial outlook as a major aviation logistics player is as strong as ever.”
John Menzies chairman and chief executive Philipp Joeinig said: “I am delighted to report a strong set of results for 2021, despite the continuing impact of Covid on aviation activity levels.
“The rebalancing of our business as a major aviation logistics player continues at pace.
“We have seen significant growth in our air cargo business by winning contracts and widening the global reach of our network, while our fuel and ground services businesses go from strength to strength.
“The reshaped business is emerging strongly from Covid and our opportunity for growth is significant.
“Our future growth will be driven by continued recovery in volumes, growth in the global aviation market, further commercial gains and the successful conversion of our exciting business development pipeline.
“As a result of significant management action to reduce costs, we expect that this growth will be achieved while delivering structurally higher margins.”