Barclays downgrades Signature Aviation as bidding war draws to close

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Barclays has downgraded Signature Aviation PLC (LON:SIG) following Friday’s recommended cash takeover offer which valued the aviation services business at US$4.72bn.

In a brief note on Monday the bank noted that the bidding war for Aviation was now drawing to a close.

As such, Barclays moved its rating to ‘equal weight’ with a 411p price target, which is the sterling equivalent of the recommended takeover price of US$5.62 per share.

On Friday, a consortium comprising Blackstone, Global Infrastructure Partners and Cascade reached the takeover agreement with Signature.

The offer sees the consortium acquire the entire issued shares other than the 19.01% stake held by Cascade and the Bill & Melinda Gates Foundation Trust.

It meant the board’s withdrawal of a prior recommendation, with the vehicle which was a partnership controlled by Global Infrastructure Partners (GIP).

As part of the new consortium GIP will own around 35% of the company.

“We believe that the offer from Blackstone, GIP and Cascade 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, and at a higher price than the previous GIP offer announced on 11 January 2021,” said Signature chairman Sir Nigel Rudd.

“The Signature board believes that the proposal provides clear benefits to our shareholders and the operational and financial resources of Blackstone, GIP and Cascade will generate enhanced opportunities for our employees, and ensure continued high quality, full services flight support for B&GA travel.”

GIP managing partner Adebayo Ogunlesi added: “We are delighted to partner with Blackstone and Cascade to make an improved offer for Signature.

“This is a powerful combination of private investors that is well placed to drive the Signature business forward.

“Our plan for Signature remains unchanged, putting customer service, operational consistency and growth at the heart of our strategy, supported by enhanced employee and stakeholder engagement and targeted investment.”

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