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Agility Public Warehousing has offered £571m ($750m) for Menzies, a cash bid the handler will recommend to its shareholders, who would receive 608p per share.
Combined with Agility’s National Aviation Services, the acquisition would create the largest airport services company in the world, in terms of the number of countries it operates in, the second-largest in terms of airports served and the third-largest in revenue terms, with combined revenues of $1.5bn last year.
The group would be wholly owned by Agility.
Philipp Joeinig, chairman and CEO of John Menzies, said: “The directors believe the offer represents a fair and recommendable price for shareholders, which recognises Menzies’ future prospects.
“Menzies is an outstanding business with a long and rich history. The board applauds the work the 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 all-cash offer represents an opportunity for shareholders to realise value for their investment at an attractive premium and valuation multiple.”
Menzies initially rebuffed a surprise hostile attempt by Agility to buy it out for 510p a share in February, when they were trading at about 438p. A week later it bought some 13% of the ordinary shares at an elevated price of 605p, costing around £73.4m ($99m).
Shares this morning were trading at about 592p, up 22% on yesterday, and the agreed deal values Menzies at approximately £571m on a fully diluted basis, and at approximately £763m on an enterprise value basis.
Hassan El-Houry, CEO of National Aviation Services 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.
“Customers will benefit from Menzies’ operational excellence at more airports around the world and will be able to choose from a broader product offering. Employees of both companies will benefit from being part of a larger, stronger group that offers more career development and advancement opportunities. 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, vice-chairman of Agility, said: “Agility’s focus is on growth and shareholder value creation. 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.”