John Menzies dubs offer from Kuwait suitor as ‘fundamentally undervaluing’ firm

posted on 15th February 2022 by Eddie Saunders
John Menzies dubs offer from Kuwait suitor as ‘fundamentally undervaluing’ firm


Aviation services firm John Menzies has dubbed a rejected offer from NAS Holding as “opportunistic”.

In an update on the London Stock Exchange on Tuesday, the firm said the offer made by NAS Holding, a subsidiary of Agility, was “opportunistic [and] conditional” with terms that “fundamentally undervalue Menzies and its future prospects.”

A cash proposal made by the Kuwait-based company of 510 pence per Menzies share was unanimously rejected earlier this month.

The proposal implies an EBITDA multiple of 6.4x, when adjusted for Menzies’ permanent cost savings of £25m, which is “significantly lower than achieved in comparable transactions over the last decade in our sector for other assets of Menzies’ size and standing,” Menzies said.

The proposal also failed to take into account “the full impact of management actions not yet reflected in Menzies’ valuation,” as well as a return of underlying volumes to pre-pandemic levels.

A “pipeline of higher margin opportunities” is thought to generate around £80m of net new annualised revenue from commercial opportunities and approximately £150-200m of new revenue over the short to medium term from “several business development opportunities.”

The statement added: “There can be no certainty that any firm offer for Menzies will be made nor as to the terms on which any firm offer may be made.”

The aviation services firm said a further announcement would be made in due course. Shareholders are urged to take no action at this time.

NAS is required either to announce a firm intention to make an offer for Menzies or declare that it does not intend to make an offer, by 5pm on 9 March 2022.