A SCOTTISH aviation services company that has been the target of a takeover bid by a Kuwaiti competitor looks set to accept an enhanced offer to buy the business.
The move comes after weeks of approaches by National Aviation Services to Edinburgh-based John Menzies, which until now had been met with rejection.
Shares in the historic Scottish firm, which provides fuelling, ground handling, lounge and maintenance services, rose significantly last week after it was first revealed Menzies had rebuffed a 510p-a-share bid proposal.
It now looks likely Menzies will be sold to the Gulf-based company after it said its board plans to recommend a renewed offer of nearly £599 million to shareholders.
NAS moved to strengthen its position with the purchase of 13.2 per cent stake with 12.1 million ordinary shares at a price of 605p-per-share by the middle of last week.
By the end of the week the suitor had secured a 19% stake in Menzies after buying a further 5.3 million shares.
NAS, which operates across the Middle East, Africa and South Asia, along with parent Agility Strategies Holding Limited, earlier described its possible offer as a “compelling opportunity” but at that stage Menzies said it was “highly opportunistic” and that it undervalued its prospects.
By holding firm against a 460p and a later 510p bid, Menzies netted close to £90 more for its shareholders from the deal set against the last potential offer.
Shares in Menzies, which has 27,000 staff operating in 200 airports, rose 25% last week.
It said it will recommend the new £559m approach to shareholders which would be expected to move forward unless a separate bidder joins the process.
Menzies said: “The board has considered the final proposal and indicated to NAS that it would be willing unanimously to recommend an offer at the financial terms of the final proposal to Menzies shareholders subject to the satisfactory resolution of all the other terms of the offer, including the approach to the customary regulatory approvals required to complete any transaction.
“Accordingly, the board is in discussions with NAS in relation to these terms and will be providing NAS with access to management and due diligence information.”
READ MORE: Menzies engages with shareholders amid buyout bid
NAS said it had maintained a growth record during the pandemic, and also said earlier that “as a successful strategic operator in the aviation services sector, NAS has a clear and detailed view on the challenges and opportunities present in the sector as it recovers from the pandemic and has framed its analysis on that basis”, adding: “Menzies’ board and management team have chosen not to engage with NAS or share any information to corroborate their differing views on the company and industry, and therefore valuation.”
It said its possible offer represented a “full and fair price relative to the information Menzies has provided to the market on its current business and prospects”.
Philipp Joeinig, Menzies chairman and chief executive, said last week that “strong performance and momentum in 2021 has continued in 2022 with further contract wins and renewals alongside the continued recovery of global flight volumes”, adding at the time: “The board remains fully confident in the recovery and outlook for the global aviation services industry as it returns to pre-pandemic trading levels and benefits from long-term structural growth drivers.”
Menzies, which will announce its results on March 8, started out as an Edinburgh bookseller in 1833, but has since transformed into an international aviation services business, earlier splitting with its distribution business.
NAS has until March 9 to make a firm offer or walk away.
Shares in Menzies closed down 3p at 580p.