UK's John Menzies soars after Kuwaiti suitor NAS becomes top shareholder

By Muhammed Husain and Amna Karimi

(Reuters) -Kuwait-based National Aviation Services (NAS) has bought a 13.2% stake in John Menzies for 73.4 million pounds ($100 million), bolstering shares of the British airport services group as investors bet on a sweetened takeover offer.

Menzies last week rejected a roughly 469 million pound takeover proposal from NAS, which it said undervalued the company. But NAS called its offer "full and fair" and sought talks with the British firm's shareholders.[nL4N2UP1Q1]

Menzies, whose stock has jumped about 80% since NAS' first offer was disclosed last week, said on Thursday it had not received another bid from NAS. Its shares closed the day nearly 25% higher at 584 pence, and were largely unchanged on Friday.

NAS said on Thursday its affiliate Agility Strategies bought about 12.1 million shares in Menzies, making it the company's biggest shareholder. It paid 605 pence each - compared with its previous bid of 510 pence apiece.

Following the share purchase, NAS' future proposals for Menzies have to be at 605 pence per share or higher under British regulations.

Milkwood Capital, a top 10 investor in the British company with a 2.5% stake, was one of the shareholders which engaged with NAS.

"We decided that to help unlock value for all shareholders in Menzies, the best course of action was to negotiate directly with NAS and secure a price for our stake in Menzies," a representative for Milkwood said in an e-mail to Reuters.

"If NAS finalises this acquisition, they are likely to have acquired a world-leading company at a fair valuation," the spokesperson added.

Menzies has said that it would "consider the best interests of Menzies' shareholders and all actions to maximise shareholder value".

The British group, like others in the aviation sector, is recovering from the impact of the pandemic. It suffered heavy losses in 2020 when lockdowns limited travel.

NAS, a unit of Kuwait's Agility Public Warehousing Co, has until March 9 to decide whether it wants to pursue the British company or walk away.

($1 = 0.7344 pounds)

(Reporting by Muhammed Husain, Amna Karimi, Pushkala Aripaka and Sinchita Mitra in Bengaluru; editing by Barbara Lewis and Jason Neely)