John Menzies hires Rothschild to analyse break-up

Logistics group John Menzies has appointed financial adviser Rothschild & Co to closely examine the prospect of splitting its aviation and distribution arms, after calls from activist investors for a break-up.

Menzies is under pressure from investors to separate its distribution and aviation arms. Picture: Contributed

Chief financial officer Giles Wilson told The Scotsman that Rothschild has been brought on board to “review the value and options for how a split structure could look”.

He added that the board is “certainly of the view that there is real opportunity with the two businesses apart” and strength in two separate management teams.

The move comes after Dermot Smurfit, chairman of the business – one of the oldest in Scotland with roots dating back to 1833 – said in August that management had engaged with specialist advisers and pension trustees, and he expected the work to take up to a year.

German investor group Shareholder Value Management in July “strongly” urged splitting the divisions, saying such a move would be “immediately and significantly value accretive, and in the interest of all shareholders”.

Wilson said Menzies’ board believes “very passionately” in what are two robust Scottish companies each with a growth strategy, and operating them separately is “the direction of travel at the moment”.

He added that such a process would not be quick, but said: “We’re looking at them as two Menzies companies. If we give them both dedicated time and management they should both grow. It’s now how to do you get to that in the right way and achieve the right value from that.”

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