DX and John Menzies have agreed revised terms for the proposed combination of DX and John Menzies' distribution division.
A statement issued by the two groups said that under the revised terms, it was envisaged that DX would acquire Menzies Distribution for £40m in cash and the issue of new DX ordinary shares representing 65% of DX's issued share capital as enlarged by the transaction.
The cash consideration would be satisfied by new borrowings by the enlarged group.
On this basis, current DX shareholders would own, in aggregate, 35% of DX's enlarged issued share capital.
It was intended that the new DX shares would be issued pro rata to John Menzies' shareholders who would own, in aggregate, 60% of DX's enlarged issued share capital and that 5% of DX's enlarged issued share capital would be owned directly by John Menzies' pension scheme as retained by John Menzies.
The statement said that as previously announced, it was proposed that approximately 17% of John Menzies' defined benefit pension scheme would transfer to the enlarged group as part of the transaction.
The receipt by John Menzies' pension scheme, as retained by John Menzies, of 5% of DX's enlarged issued share capital was part of the transfer arrangements agreed with the John Menzies pension trustees.
The update continued: "In addition, the boards of DX and John Menzies recognise the importance of a dividend to shareholders of the enlarged group.
"It is intended that the enlarged group will reinstate the payment of a regular dividend on completion of the transaction, taking into account the leverage, earnings growth and investment requirements of the business."
Alongside the transaction, John Menzies said it intended to raise gross proceeds of approximately £30m through a conditional cash placing of new shares primarily to institutional investors, the proceeds of which would be retained by John Menzies post completion of the transaction.
(LON:MNZS) Menzies John PLC share price was -5.75p at 714.75p