THE new Gulf-based owner-in-waiting of John Menzies has said its merger with the 189-year-old Scottish company “creates a world leader in airport services” as it pledged to invest in “talent, infrastructure, and sustainability”.
The Edinburgh-based company accepted a takeover bid by Kuwait-based National Aviation Services after initially spurning its advances.
The £571 million bid was tabled by the subsidiary of Agility Public Warehousing a month ago, but at that time was still conditional.
Menzies said on Wednesday that it has now reached an agreement on the terms of the deal with the suitor.
The 608p per share deal is 81 per cent ahead of Menzies’ share price before an offer by Agility was first announced in early February, which had followed two previous lower bids.
He said: “Menzies is an outstanding business with a long and rich history. The board of Menzies applauds the work that the Menzies management team have done to steer the business through the challenging impacts of the pandemic and position the business for continued future growth and the next evolution in its journey.
"The Menzies all-cash offer from Bidco represents an opportunity for current shareholders to realise value for their investment at an attractive premium and valuation multiple."
READ MORE: 189-year-old Scottish firm to be sold to Kuwaiti suitor
Hassan El-Houry, group chief executive of NAS, said employees of both companies will “benefit from being part of a larger, stronger group that offers more career development and advancement opportunities”.
He said: “This deal creates a world leader in airport services and unlocks value for all stakeholders.
“The NAS-Menzies combination brings together highly complementary operations and ensures that the combined business has the scale and resources to grow.
“Menzies shareholders will realize a premium in return for supporting the transaction. Customers will benefit from Menzies’ operational excellence at more airports around the world and will be able to choose from a broader product offering.”
He added: “The combined business will have the capital to invest in the talent, technology, innovation, infrastructure, equipment, and sustainability leadership required to accelerate growth.”
Tarek Sultan, Agility vice-chairman, said its focus is on growth and shareholder value creation.
He said: “We are a long-term, multi-business operator and investor aiming to create value with a disciplined investment strategy that focuses on companies in high-growth sectors with strong fundamentals, reinforced by management teams with established records, best-practices governance, and alignment with Agility’s vision and values.
“Menzies is a good fit. The aviation sector has strong growth potential, and Menzies is one of the most-established providers in the industry, with a sustainability focus we share."
READ MORE: Menzies engages with shareholders amid buyout bid
He said: "A NAS-Menzies combination will create a strong and resilient industry player, well positioned to grow and drive future earnings. We expect this acquisition to further diversify Agility’s revenue base and strengthen cash flow generation.”
Founded as a bookshop in 1833, John Menzies later became a news distributor and a series of acquisitions put it into the airport services sector in the 1980s. It sold its distribution arm in 2018.
Its 27,000 staff handles cargo, planes and fuel at 200 airports in 37 countries.
NAS has a presence across the Middle East, Africa and South Asia, and has over 6,000 staff operating in 55 airports.
Shares in Menzies closed up 4%, or 23p, at 593p.
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