John Menzies’ Biggest Shareholder Supports Breakup Discussions

John Menzies Plc’s biggest shareholder is backing an activist investor’s campaign to get the struggling logistics company to consider splitting in two.

Kabouter Management LLC, a Chicago-based asset manager that owns 9 percent of Menzies, said the company operates in two “unrelated sectors” -- print media distribution and aviation support services. It said the structure “contributes significantly to the undervaluation” of Menzies’ stock.

The statement from Kabouter follows Thursday’s disclosure by Lakestreet Capital, a Swiss-based activist fund, that it was engaged in talks with Menzies’ senior management about “unlocking its intrinsic value,” possibly through a breakup.

Menzies’ shares had fallen by more than 40 percent in a year before Lakestreet’s announcement. The stock rose 2.6 percent to 400 pence at 3:58 p.m. in London, giving the company a market value of about 245 million pounds ($372 million).

Lakestreet estimates that by splitting in two, Edinburgh, Scotland-based Menzies would have an implied market value of about 415 million pounds.

Kabouter said it welcomed steps taken by Menzies after recent contract losses, management changes and a dividend cut. But it called on the company to “maintain a healthy dialog” on exploring all options to “unlock additional value, including a breakup.”

A spokesman for John Menzies was not immediately available for comment. On Thursday, the company declined to comment in response to the Lakestreet statement.

Kabouter is a small-cap equities manager, which says it seeks to invest in companies that are undervalued or misunderstood.

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