10th Feb 2022 12:29
(Alliance News) - Agility Public Warehouse Co KSC on Thursday urged shareholders of John Menzies PLC to "carefully consider" its takeover offer, after Menzies' board unanimously rejected it the day before.
The Kuwaiti logistics company had made a cash offer for the aviation services company of 510 pence a share via its holding subsidiary, National Aviation Services Holding SPC, on February 2.
The board of Menzies rejected the unsolicited offer on Wednesday, calling it "entirely opportunistic", having also rejected Agility's previous cash offer of 460p per share back in January.
Agility responded to this on Thursday, noting the new offer was a 76% premium to Menzies closing price of 290 pence per share last Wednesday. It is also 9.8% premium to Menzies' closing price of 464.5p on Wednesday, which had climbed 35% in the day's trading.
Menzies had maintained this was still an undervaluation, as the offer failed to appreciate its growth potential as the freight and flight industries recover from the impact of the pandemic. It also said the offer failed to recognise its new business wins of GBP120 million, and GBP25 million in permanent cost-cutting measures since 2019.
"As one of the industry's fastest growing aviation services providers, with a presence in more than 55 airports across the Middle East, Africa and South Asia, NAS has a strong understanding of the dynamics of the aviation sector and the opportunities and challenges ahead as the sector recovers from the pandemic," Agility responded.
The Kuwaiti company said its subsidiary and advisers had considered publicly available information in detail, including Menzies' pre-pandemic performance, cost reduction measures, contract renewals and new business. It also considered the company's debt position, and ability to generate cashflow, and create returns for shareholders.
Agility said NAS and Menzies share "highly complementary geographical footprints and product portfolios with minimal overlap", and a combination would bring geographical diversification to Menzies.
Menzies shareholders would also see a "compelling opportunity" to realise the cash value of their investments, it 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," said NAS Chief Executive Hassan El-Houry.
"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," El Houry continued.
Shares in Menzies were down 4.5% to 456.62 during Thursday midday trading.
By Elizabeth Winter; [email protected]
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