• Wed. May 11th, 2022

John Menzies accepts new £550m takeover offer from Kuwaiti rival | Air industry

British aviation services firm John Menzies has reached a £550million takeover deal with a Kuwaiti rival, which is set to end a price negotiation after four separate bids.

The Edinburgh-based company, which offers services ranging from cargo and baggage handling to passenger check-in and aircraft de-icing and refueling, told the stock exchange on Monday it would unanimously recommend a deal if National Aviation Services (NAS) confirms its offer of 608p per share.

Aviation service companies have been among the hardest hit during the coronavirus pandemic as lockdown restrictions forced airlines to cut flights for months. Outsourced services were particularly vulnerable as airlines sought to reduce costs as quickly as possible.

The takeover would cap off one of the London Stock Exchange’s most extraordinary corporate stories. Menzies was founded in 1833 in Edinburgh as a bookshop, with the eponymous founder eventually becoming the first Scottish agent for author Charles Dickens and Punch magazine.

Newspaper distribution and a chain of newsagents and bookstores became an important part of the business and in 1948 Menzies opened its first outlet at an airport, before expanding into cargo handling in 1987 .

It sold its retail business in 1998 and four years ago sold its press business to focus on aviation services, shortly before the airline industry suffered its biggest crisis.

Menzies revealed the first two takeover approaches of 460p and 510p per share on February 9. He described these early unsolicited approaches as “very opportunistic” because the valuation did not accurately reflect the value of the business before the pandemic.

Sign up for the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

NAS had returned with an offer of 605p per share, which was also rejected by the Menzies board before accepting the final offer of 608p.

However, shares of Menzies traded below that offer price on Monday morning, with the shares gaining just 0.3% to hit 585p – although it was the highest level since September 2018.

Menzies said, “NAS has confirmed to the board that the financial terms of the final proposal are final and will not be increased” unless another bidder steps in with a higher bid. Under stock market rules, NAS has until March 9 to make a formal offer.