Aviation services group John Menzies has rebuffed a takeover bid from Agility subsidiary National Aviation Services (NAS) Holding.
Menzies, which provides airfreight wholesale through Air Menzies International and ground handling through Menzies Aviation, said that after careful consideration it had rejected the offer of £5.10 per share.
The board concluded that the proposal is "entirely opportunistic, conditional and that the terms fundamentally undervalue Menzies and its future prospects".
The proposal follows an earlier unsolicited approach from NAS regarding an all cash offer at £4.60 per Menzies share.
"The Board is committed to continuing the execution of its strategy and believes that the proposal is highly opportunistic and comes at a time when the full impact of management actions is not yet reflected in Menzies valuation and underlying volumes have yet to return to pre-pandemic levels," John Menzies said.
The company pointed out that since 2019 the business has been re-shaped with £25m of permanent cost removed and a re-focussed commercial approach that has generated £120m of annualised revenue.
"The Proposal fails to reflect Menzies strong growth prospects and attractive industry outlook," the company added. "Menzies is well positioned as a global player in a market with proven structural growth and will benefit from the continued recovery in flight and freight volumes.
"We will continue to deliver against our five strategic priorities, focussing on air cargo services, new fuelling operations and high quality ground handling with new operations being targeted in emerging markets where margins are typically higher."
The company said that in 2022 it has clear and attainable commercial opportunities that will generate approximately £80m of new annualised revenue and several business development opportunities that will deliver approximately £150-200m of new revenue over the short- to medium-term, all of which are expected to be at higher margins.
Philipp Joeinig, chairman and chief executive of John Menzies, said: “Menzies continues to make good progress with strong performance across a number of service lines, which together with productivity gains, saw the Group to finish last year strongly.
"This strong performance and momentum in 2021 has continued in 2022 with further contract wins and renewals alongside the continued recovery of global flight volumes.
"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.
"The Board believes the strong portfolio mix, positioning of Menzies and the ongoing execution of Menzies’ strategy will create significant value for shareholders in the near and medium term.”
