John Menzies on Wednesday said it has accepted an offer from GIL International Holdings V, a subsidiary of Kuwait’s Agility Public Warehousing Co.
The deal, at 680 pence per share, values the Edinburgh-based aviation services and cargo handling firm at £571 million on a fully diluted basis and offers an enterprise value of £763 million.
The price tag is 81% higher than the company’s share price of 335p on February 8, the day before it entered an offer period. It is 19% higher than its 570p closing price on Tuesday. John Menzies shares were up 3.7% at 591.00 early Wednesday.
John Menzies has a market capitalisation of £524 million.
Agility will combine Menzies with its National Aviation Services unit.
‘The Menzies board, which has been so advised by Goldman Sachs International as to the financial terms of the acquisition, consider the terms of the acquisition to be fair and reasonable,’ a statement read.
The deal ends a long-running saga. Back in early February, Menzies said it rejected a 510p bid from its Kuwaiti suitor. This followed a previous unsolicited cash offer of 460p a share, the company had explained.
In early March, the cargo handling firm gave Agility an extension on the deadline to make a formal takeover offer.
That so-called put-up-or-shut-up deadline was due to end on Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,548.84
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Hang Seng: up 1.8% at 22,313.21
Nikkei 225: closed down 0.8% at 28,027.25
S&P/ASX 200: closed up 0.7% at 7,514.50
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DJIA: closed up 338.30 points, or 1.0%, at 35,294.19
S&P 500: closed up 56.08 points, or 1.2%, at 4,631.60
Nasdaq Composite: closed up 264.73 points, or 1.8%, at 14,619.64
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EUR: up at $1.1121 ($1.1113)
GBP: down at $1.3120 ($1.3135)
USD: down at JP¥121.82 (JP¥122.57)
GOLD: up at $1,924.10 per ounce ($1,910.78)
OIL (Brent): up at $112.61 a barrel ($109.35)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday’s key economic events still to come
1100 CEST EU business & consumer surveys
1400 CEST Germany consumer price index
0815 EDT US ADP national employment report
0830 EDT US gross domestic product
1030 EDT US EIA weekly petroleum status report
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Germany sounded the first official alarm about gas supplies on Wednesday, as the country comes to grips with the reality that Russia’s invasion of Ukraine is very likely to disrupt its energy supplies to some degree. ‘There are no current supply bottlenecks,’ said Economy Minister Robert Habeck. ‘But we have to ramp up our precautionary measures to be ready in case of an escalation from the Russian side.’ Habeck’s decision puts the country on an early alert, as detailed in its emergency gas supply plan. The three-stage emergency plan details ways to conserve gas, secure supplies and make sure households have adequate amounts of fuel. The invasion of Ukraine has prompted a series of sanctions on Russia that have left it scrambling for foreign currency reserves. However, Europe has not cut off its purchases of oil and gas. Russian President Vladimir Putin has said that Russia will soon only accept payments gas in roubles, likely an effort to bolster its currency. Western countries have said they will not comply.
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BROKER RATING CHANGES
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RBC cuts Lloyds Banking to ’underperform’ (outperform) - price target 44 (45) pence
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Citigroup cuts Experian to ’neutral’ (buy) - price target 3146 (4150) pence
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RBC cuts Antofagasta to ’underperform’ (sector perform) - price target 1350 (1450) p
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COMPANIES - FTSE 100
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Electrocomponents announced a name change and said it expects annual revenue and margins will be at the upper end of market estimates. Electrocomponents, ahead of an investor day on Wednesday, said it expects annual revenue and operating profit margin to be at the top end of current consensus estimates. Electrocomponents ends its financial year on Thursday. The London-based distributor of industrial and electrical parts said trading in recent weeks has been in line with what it reported for the nine weeks to March. During that period, revenue grew 22% on a like-for-like basis compared to a year earlier. In addition, the firm said it will change its name to RS Group PLC in ‘early May’. Chief Executive Lindsley Ruth explained: ‘We will be moving forward from Electrocomponents PLC to RS Group PLC in early May. RS is our primary customer brand, recognised by designers, builders and maintainers of industrial equipment and operations around the world. As RS Group we will bring our business together under one brand, united behind a common ambition and our single purpose: making amazing happen for a better world.’
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COMPANIES - MAIN MARKET AND AIM
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Russian gold and silver miner Polymetal said it has seen a hike in demand from Russians trying to stash their cash in gold. The business said that it was still able to sell gold from Russia to East Asia and Kazakhstan, despite crippling sanctions on Russia from Western countries. While export opportunities to Europe and the US have dropped, Polymetal said that Russian retail customers – that is to say individuals rather than banks and other institutions – have been snapping up the precious metal. ‘Domestic demand for gold is boosted by local retail investment,’ the former FTSE 100 company said.
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Video game services firm Keywords Studios posted double-digit growth in revenue and profit. In 2021, revenue rose 37% to €512.2 million from €373.5 million. Pretax profit jumped 48% to €48.0 million from €32.5 million. Keywords recommended a final 1.45p dividend, taking its annual payout to 2.15p It did not pay a dividend in respect to 2020. It has also made a decent start to the new year, it noted. Keywords expects 2022 to be a ‘particularly strong year for new game launches’. ‘While we are not immune to the inflationary pressures and competition for talent, we continue to enhance our position as an attractive employer and to take account of our costs as we agree projects with our clients, who are well aware of the industry-wide talent challenge,’ the company added. ‘We are monitoring the situation in Russia, where our teams continue to work but entirely focused on critical work for non-Russian clients. In parallel, and in close partnership with our clients, we have been actively looking at relocating work to other locations across the group, benefiting from our global footprint.’ For 2022, Keywords expects an annual outturn at the top end of current market expectations. Company-compiled consensus has revenue for 2022 at a €587 million to €610 million range, with adjusted pretax profit between €90 million and €95 million.
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Wednesday’s shareholder meetings
Brunner Investment Trust PLC - AGM
Mediazest PLC - AGM
Micro Focus International PLC - AGM
Parsley Box Group PLC - GM re equity raise
Power Metal Resources PLC - GM re carried forward losses
Power Metal Resources PLC - AGM
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