Edinburgh-based John Menzies has accepted a sweetened takeover proposal from its Kuwaiti suitor that values the airport services company at about £ 560mn.
The FTSE 250 group’s board indicated on Monday it would unanimously recommend a final offer of 608p a share from National Aviation Services, a reversal of the board’s previously hostile position towards approaches.
The bid, which is yet to be formalized, would be a significant premium over NAS’s previous offers of 460p and 510p per share.
John Menzies shares were flat at 584p after surging 25 per cent last Thursday when NAS began to build a 19 per cent stake in the company, paying 605p a share, making it the largest shareholder and prompting investors to bet on a new bid.
NAS has argued a tie-up makes sense, given the limited geographical overlap of businesses and the fragmented global market for aviation services.
John Menzies’ board earlier this month described NAS’s unsolicited bid of 510p a share, a 52 per cent premium to its share price at the time, as “highly opportunistic”.
The two sides have publicly disputed valuations of the business, with John Menzies arguing previous offers did not reflect its “true intrinsic value” or its prospects as the aviation industry recovered from the pandemic.
John Menzies, which traces its history back to a bookshop and publishing business set up in 1833, has become the latest UK business to attract the attention of an overseas bidder following the interest from NAS, a subsidiary of Kuwaiti logistics group Agility Public Warehousing.
Travel restrictions during the pandemic hit John Menzies cargo handling and aircraft maintenance operation, sending its share price spiraling to a near record low in 2020.
Agility is a Kuwaiti supply-chain and logistics conglomerate with 16,000 employees and operations and investments in more than 40 countries.
The US Department of Justice in 2017 said Agility agreed to pay $ 95mn to resolve civil fraud claims over its work in Iraq, which arose from allegations that Agility overcharged the US government when performing contracts to supply food for US troops between 2003 and 2010.
The agreement lifted a seven-year suspension on US government contracts, and Agility has since won new contracts with the Department of Defense, which are ongoing.
Agility at the time said it acted “transparently and responsibly” during an “extraordinarily complex mission”.
John Menzies continued to push back against the approach from NAS at the end of last week, adding it was “confident in the execution of Menzies’ strategy and the significant potential value creation that this strategy will deliver ”.
But the board said on Monday it had indicated to NAS that it would be willing to recommend the final offer, which will not be increased unless John Menzies receives a rival takeover bid.