The combination of cheap financing and low valuations has put two more FTSE All-Share firms in play this month as fashion e-commerce returns specialist Clipper Logistics (CLG) and airport services group John Menzies (MNZS) attract trade buyers.
After chat in the weekend press suggesting Clipper was seeking a private equity buyer, the UK firm revealed this morning it had agreed the terms of a potential offer of 920p per share from US rival GXO Logistics.
The offer, made up of a mix of 690p in cash and GXO shares to the value of 230p, based on the US firm’s three-month volume weighted average share price and the dollar-sterling exchange rate, would value Clipper at more than £940 million.
While GXO stressed the offer was not firm at this stage, Clipper shares advanced 111p or 14.3% to 888p on the announcement.
GXO chief executive Malcolm Wilson said the two companies had ‘highly complementary service offerings, customer portfolios, and footprints in the UK and Europe, and we are natural partners with a very strong cultural fit.’
Wilson added: ‘We believe we can achieve very significant productivity opportunities by taking advantage of technology and infrastructure overlap in the joint enterprise.’
LIFT-OFF FOR NAS
Meanwhile, after weeks of chasing, Kuwait aviation ground services firm NAS finally reached an agreement with the board of smaller UK rival John Menzies.
Having previously rejected offers of 460p, 510p and 605p per share, Menzies indicated it would recommend to shareholders NAS’s final offer of 608p per share, which values the company at more than £550 million.
Menzies shares were little changed at 586p, but investors who owned the shares at 286p at the start of the month are already sitting on gains of more than 100% at the current price.
EXPERT VIEW
‘The fight for UK assets by foreign companies continues apace with two targets in the services sector looking as if they will be the next ones gobbled up,’ commented AJ Bell investment director Russ Mould.
‘Both takeovers make sense strategically as they would complement the predators’ existing expertise and increase their scale in important markets.
‘The UK stock market may have a reputation being full of old economy companies and generally lacking the supercharged levels of growth seen in US tech space. However, what’s underappreciated is the plethora of small and medium-sized business which have carved out a niche and become important players,’ added Mould.
Disclaimer: The author Ian Conway and editor Daniel Coatsworth own shares in AJ Bell, the owner and publisher of Shares magazine
