Menzies bows to break-up pressure with news sale

By Mark Kleinman, City editor
John Menzies, the FTSE-250 logistics group, will finally bow to long-standing pressure from activist? shareholders this week when it announces the sale of one of Britain's biggest newspaper distributors.
Sky News has learnt that John Menzies has struck a deal with Endless, the turnaround investor, to offload Menzies Distribution for a price close to €70m.
The deal, which has been demanded by a number of John Menzies shareholders such as Lakestreet Capital Partners for more than three years,‎ is likely to be announced to the London Stock Exchange by Friday.It will put under Endless's ownership a business which delivers more than 7m newspapers and magazines every day, with its network of drivers covering more than 135,000 miles in each 24-hour period.The price expected to be paid by Endless represents a multiple of less than three times‎ last year's profits for Menzies Distribution, but reflects the prospects of a declining industry as print newspaper circulations decline.Its sale will leave John Menzies as a pure-play aviation group, which provides services such as cargo-handling, ground-handling and fuelling to customers.Investors have argued for some time that focusing on aviation will lead to a re-rating of John Menzies' shares, which have fallen by more than 14% during the last 12 months.
Last August, the company abandoned a proposed cash-and-shares deal to sell its distribution business to‎ DX Group, which has also been targeted by an activist investor, Gatemore Capital Management.Updating the stock market in May, John Menzies ‎said the auction of Menzies Distribution was "in progress, [but] this process is taking longer than we anticipated".It was unclear whether the company's leading shareholders would welcome the price struck with Endless, which has a strong track record at improving the fortunes of many of the companies it acquires.
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The sale of Menzies Distribution has been run by Rothschild, the investment bank.A spokesman for John Menzies declined to comment on Wednesday evening, while Endless could not be reached for comment.
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