John Menzies Plc has been targeted by a Swiss-based investment fund that wants the struggling logistics and airport services company to consider splitting in two.
Lakestreet Capital, which in March disclosed a stake of more than 3 percent in Menzies, said on Thursday it was “constructively” engaged in talks with the company’s senior management about “unlocking its intrinsic value.”
Menzies shares rose 5.6 percent to 383.5 pence at 12:38 p.m. in London, valuing the Edinburgh, Scotland-based company at about 235 million pounds ($354 million).
After a 40 percent drop in the stock’s value in the past year, Lakestreet said the company was “dramatically undervalued, especially when considering the sum of its parts” and urged its management to explore separating its Menzies Distribution and Menzies Aviation businesses.
Lakestreet estimated that by splitting in two, Menzies would have an enterprise value -- the sum of equity and borrowings -- of 525 million pounds. Menzies’ last reported net debt was about 111 million pounds.
A spokesman for Menzies declined to comment. Lakestreet said it had been in discussions with the Chairman Iain Napier, Chief Executive Officer Jeremy Stafford, and Finance Director Paula Bell.
Lakestreet describes itself as an active investor that targets companies it believes are undervalued, but with strong long-term growth potential.
Menzies’ distribution unit is a wholesaler of newspapers, magazines, and periodicals, while the aviation group provides ground-handling services to the air cargo industry.