Investors in uproar over £60m bid for airport firm
DX GROUP is in talks to buy the distribution arm of John Menzies, prompting a backlash from shareholders.
Under the agreement, the mail delivery firm will acquire Menzies Distribution for £60m in cash plus new DX shares, with Menzies shareholders owning around three-quarters of DX’s stock.
But Gatemore Capital, DX Group’s largest shareholder, has said the deal is like ‘tying two rocks together to see if they will float’.
The investment firm, which has an 11.3pc stake in DX, said it was ‘highly irregular for a company to announce talks months ahead of its ability to complete’ and the announcement was most likely made to disguise the firm’s poor performance. DX has been hit by sluggish growth in recent months and yesterday announced a pre-tax loss of £29.3m in the six months to December last year, while revenues remained relatively flat at £142.7m.
Gatemore, which has been calling for the group chairman, Bob Holt, and non- executive director Paul Murray to step down, following a 90pc decline in shareholder value under the Holt’s tenure, said the firm was ‘ simply trying to save face’ ahead of its EGM.
Liad Meidar, Gatemore Capital’s chief investment officer, said yesterday that they were ‘ highly suspicious about the timing of the announcement and the board’s motivations around it’ adding it ‘seems like an attempt to distract from terrible operating results’.