SHARES in John Menzies soared after the Scottish airport services business revealed a “highly opportunistic” takeover bid from a Kuwait-based company.
It came as the Edinburgh-headquartered firm revealed it rejected the unsolicited £469 million offer from National Aviation Services (NAS).
Shares in the historic Scottish firm, which provides fuelling, ground handling, lounge and maintenance services, jumped more than a third higher in early trading after it said it had rebuffed the 510p-a-share bid proposal.
It is unclear at this stage if a further bid will be made from NAS or elsewhere.
Menzies said it is well positioned as a global player and that the proposal “fails to reflect Menzies strong growth prospects and attractive industry outlook”.
It said it has proven structural growth and that it is set to benefit from the continued recovery in flight and freight volumes.
The move comes after the stock took a knock amid the pandemic, which has battered the aviation sector. In February 2021 shares sat at 213p.
The group has stripped out £25m of costs since 2019 and embarked on a “clear and deliverable” strategy.
It declared: “Our pipeline of opportunities is full.”
The bidder is an aviation services provider in emerging markets, which is part of the wider Agility Public Warehousing Co.
The proposal followed an earlier 460p-a-share possible offer previously made by NAS.
Menzies said: “The proposal is highly opportunistic and comes at a time when the full impact of management actions is not yet reflected in Menzies’ valuation and underlying volumes have yet to return to pre-pandemic levels.”
The Menzies board said it “carefully considered” the proposal together with its financial advisers Goldman Sachs International and said the terms “fundamentally undervalue Menzies and its future prospects”.
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Philipp Joeinig, Menzies chairman and chief executive, said that the board had unanimously rejected the proposal.
“Menzies continues to make good progress with strong performance across a number of service lines, which together with productivity gains, saw the group to finish last year strongly,” he said. “This strong performance and momentum in 2021 has continued in 2022 with further contract wins and renewals alongside the continued recovery of global flight volumes.
“The board remains fully confident in the recovery and outlook for the global aviation services industry as it returns to pre-pandemic trading levels and benefits from long term structural growth drivers.”
It is the latest of a number of major Scottish businesses to attract takeover interest, including Perth-based transport giant Stagecoach which agreed terms on a £1.9 billion all-share merger with National Express in which it now owns 25%, in December.
Menzies added: “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. A presentation for analysts and investors will be made available on Menzies’ website. Shareholders are urged to take no action at this time.”
Menzies will announce its results on March 8.
The company started life as an Edinburgh bookseller in 1833, but has since transformed into an international aviation services business, with global operations, earlier splitting with its distribution business.
The latest approach from NAS marked a significant premium on Menzies’ 335p-per-share closing price on Tuesday.
Shares in Menzies closed up 43 per cent at 478p on Wednesday.
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