John Menzies rejects £470mn ‘opportunistic’ offer from Kuwait-based NAS

John Menzies, the Edinburgh-based aviation services group, has become the latest British company to attract the attention of an overseas bidder.

Shares in the FTSE 250 group, which provides cargo handling services, refuelling and aircraft maintenance at more than 200 airports, soared on Wednesday after it revealed it had rejected an unsolicited offer from National Aviation Services, a Kuwaiti-based suitor, valuing it at £469mn.

Menzies described the bid from NAS, a subsidiary of freight and logistics group Agility Public Warehousing, as “opportunistic”. It unanimously rejected the all-cash offer of 510p a Menzies share — a 52 per cent premium on Tuesday’s closing price of 335p.

Menzies shares jumped more than 35 per cent to 450p in morning trading in London, a level not seen since before the coronavirus pandemic in 2020.

The offer for the group follows NAS’s earlier 460p a share approach. Agility, which reported revenues of $5.3bn in 2020, has interests in logistics, real estate, waste management and aviation services. It was not immediately available for comment.

“The board of Menzies has unanimously rejected this unsolicited and highly opportunistic proposal, which we believe does not reflect Menzies’ true intrinsic business worth or its prospects,” said Philipp Joeinig, chair and chief executive.

The offer “comes at a time when the full impact of management actions is not yet reflected in Menzies’ valuation and underlying volumes have yet to return to pre-pandemic levels”, the group said.

Menzies, which had a market capitalisation of about £308mn on Tuesday evening before news of the bid emerged, was struggling with weak cargo volumes and flight schedule reductions a year before the coronavirus pandemic struck, and was further hampered by restrictions to the travel industry.

The group was “well positioned” to benefit from “significant opportunities” as the aviation industry recovered, it said.

In September, the company struck an optimistic note, but said volumes for its ground services and fuelling business were unlikely to return to pre-pandemic levels for two years.

Menzies is the latest mid-cap to garner interest from an overseas buyer, with some investors warning that UK plc is for sale thanks to relatively low valuations in the wake of the pandemic and Britain’s exit from the EU.

Aerospace and defence groups Meggitt and Ultra Electronics are both in the process of being taken over by US companies. Aggreko, the mobile power specialist, was taken over by private equity companies TDR Capital and I Squared Capital last year. Private equity groups in particular have been looking to take advantage of relatively cheap-rated industrial stocks.