THE Kuwaiti company that has made two bids to take over John Menzies has responded to the double rejection, saying it had offered a “compelling opportunity”.
National Aviation Services (NAS) noted the announcement made by Edinburgh-based Menzies on Wednesday that it had unanimously rejected the latest offer worth £469 million and confirmed that it had made two proposals to Menzies.
Shares in John Menzies rose 43 per cent at 478p on Wednesday and remained buoyant on Thursday.
Menzies said in its rejection that it is well positioned as a global player and that the proposal “fails to reflect Menzies strong growth prospects and attractive industry outlook”.
It described the move as “highly opportunistic”.
The first bid was made on January 17 for a possible cash offer of 460p per share and rejected days later.
The second proposal was made on February 2 for a possible cash offer at 510p, representing a premium of approximately 76 per cent to Menzies' closing share price of 290p on the day of the second offer, and 68% to Menzies' 30-day volume weighted average share price of 304p.
NAS has a presence in more than 55 airports across the Middle East, Africa and South Asia.
It is part of the Agility Public Warehousing Company KSCP group which it said has been one of the largest investors in the logistics sector globally over the past 20 years.
READ MORE: 'Highly opportunistic' bid to take over 189-year-old Scottish company
NAS said it 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 to formulate its proposals.
NAS has also 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”.
It said: “NAS believes that its improved possible cash offer at 510p 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 said it “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”.
Hassan El-Houry, NAS group chief executive, 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.”
It said it has grown during the pandemic.
The Menzies board said on Wednesday it had carefully considered the proposalwith its financial advisers Goldman Sachs International and said the terms “fundamentally undervalue Menzies and its future prospects”.
Menzies added: “Our pipeline of opportunities is full.”
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