For a deal that seemed to have huge benefits for both sides, there was always a hint of the “if” about John Menzies’ merger plan with DX Group.
Comparatively, any discussion about the Standard Life Aberdeen focused on the “when”.
The deal, announced in March, for the the Slough-based logistics group to acquire the distribution arm of John Menzies on a cash and shares basis, came amid an internal review at Menzies
as to whether it would split
its aviation and distribution arms.
Linking up with a business that offered a daytime delivery network to complement Menzies’ night-time newspaper distribution provided an answer, even if it was described by one DX investor as an “ill-conceived transaction ... negotiated from a position of weakness”.
The terms were eventually revised in DX’s favour, but after a profit warning and clear-out at the top, Menzies has opted to walk away.
Importantly, the Menzies board has now acknowledged its preference to divide the company.
For now though, thanks to the ASIG acquisition, its aviation business is taking off, while the plan for a “24-hour UK wide logistics network” is stuck on the tarmac.
It would take a considerable level of cash to enter a daytime delivery circuit
which is booming thanks to the growth of e-commerce,
so it may well be a case of “when” and not “if” Menzies takes a look at another mid-level logistics player.
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