The Edinburgh-based aviation services company have accepted a £560m takeover offer from National Aviation Services (NAS), who work in Africa, Asia and the Middle East.
Fourth time lucky
Menzies Aviation is one of Scotland’s largest firms. They offer ground services such as baggage handling, passenger check-in and plane refuelling for airports in 37 countries. The company was hit hard by the pandemic, with travel restrictions severely reducing the number of passengers passing through airports. Consequently, 2020 saw the company’s share price drop to a near-record low. NAS made the firm two offers on 9 February earlier this year, for 460p and then 510p a share, the latter being 52p below Menzies’ share price at the time. These offers were flatly rejected and labelled by the board as “highly opportunistic”, as they did not reflect the company’s “true intrinsic worth”. Menzies also refused a later offer of 605p from the firm before finally agreeing on the fourth offer of 608p a share.
From books to baggage
Menzies Aviation was founded in 1833 as a bookseller under the name John Menzies. The founder was famously the first Scottish agent of Charles Dickens and the magazine Punch. By the 1960s, they ran a large publishing and newspaper distribution service with over 350 railway kiosks and 161 other shops, and in 1987 they expanded into cargo handling. By 2018 they had sold off their retail and newspaper businesses to focus on aviation, just before the COVID-19 pandemic struck. Much of their expansion has been through acquisition, most notably in 2016 when they bought the world’s largest aeroplane-refuelling company Asig.
NAS is a subsidiary of the Kuwait-based conglomerate Agility. They currently own 19% of Menzies’ shares. They have argued that a buy-out makes sense, as the two companies have little geographical overlap, and the ground-services market is currently very fragmented. NAS has until 9 March 2022 to make a formal offer. Until then, there is potential to be outbid.
