UK-listed aviation services provider Signature Aviation is to be acquired by Global Infrastructure Partners (GIP) in a deal worth $4.6 billion.
Signature’s board is recommending acceptance of the offer, which values each share at $5.50 – a 51% premium over the closing price on 16 December, the final business day prior to the start of the offer period.
Fixed-base operation (FBO) provider Signature had become the subject of a bidding war, with US funds Cascade Investments and Blackstone Core Equity Management Associates on 8 January teaming up to table a $5.17 offer. Cascade – a vehicle controlled by Bill Gates - already owns a 19% stake in Signature.
Signature revealed that Blackstone was bidding on its own in mid-December, at the same time rejecting an earlier offer from GIP, which it said was “at a lower price than the Blackstone proposal”.
Although GIP says conditions in the business aviation market are “likely to remain subdued for some time”, it believes it can help Signature grow – both organically and through bolt-on acquisitions.
In addition, Signature’s market-leading position will allow it to better respond to long-term challenges, including the “increasing focus on the environmental impacts of air travel”.
Sir Nigel Rudd, Signature chairman, says: “Over recent years, the management of Signature has created a leading global private aviation support services business, whilst streamlining the group to maximise value for shareholders.
“We believe that the offer from GIP represents an attractive and certain value in cash today for Signature Shareholders, reflecting the high quality of the business and its network, its people and its future prospects.”
Adebayo Ogunlesi, chairman and managing partner of GIP, adds: “Signature, like many businesses in the aviation sector, needs to address the challenges resulting from Covid, whilst market conditions and earnings are likely to remain subdued for some time.
“As an experienced, long term infrastructure investor with a strong operational focus, we believe that we are the ideal partner for Signature going forward.”
Investment firm GIP has around $71 billion of assets under management, including ownership of Edinburgh airport in Scotland, plus a stake in London Gatwick.
Signature was previously known as BBA Aviation, but changed its name in November 2019 following the sale of parts business Ontic for $1.3 billion, a move which allowed it to focus on the FBO market. Signature employs 5,300 people across 370 locations.