ITALY/UK. Autogrill is set to take full control of UK travel retail-to-catering firm Alpha Airports Group after the two companies’ boards agreed a recommended mandatory cash offer of 110 pence per share. The offer values Alpha’s share capital at around £193 million.
Autogrill Chief Executive Officer Gianmario Tondato said: “Autogrill places significant importance on the UK and sees Alpha Airports as the right player to gain a meaningful exposure to this attractive market as well as in other important countries in which Alpha Airports operates. We very much look forward to working with Alpha Airports’ management team to expand further the combined business.”
Alpha Airports Group Chairman Martin Flower said: “This is excellent news for Alpha Airport’s shareholders, customers, suppliers and employees. Shareholders are getting 110p for each share, a +58.3% premium to the closing price just last Tuesday, in a compelling cash offer with a minimum of conditions attached. For Alpha Airport’s other stakeholders the acquisition by Autogrill represents a unique opportunity to develop Alpha Airports on a truly global scale, enhance its service offering and build on its market-leading positions.”
The offer is also a premium of +9.5% over the closing price of 1 June, the final day of trading before the offer was made today.
As we reported last week, Autogrill has also signed a non-binding letter of intent with Servair for that company’s remaining 16 million shares in Alpha, valid until 11 June. It means Autogrill now owns or has undertakings in respect of 51.9% of Alpha’s shares.
The agreement is the culmination of a momentous day for Alpha, which began when Autogrill confirmed that it was launching a full offer for all the shares in the UK group.
That was confirmed by Alpha Airports Group CEO Peter Williams who told The Moodie Report this morning at 08.20 GMT: “It makes all round sense and is a very good deal for shareholders.” Confirming that it was “an agreed deal” he said that there was a very “logical fit” between the companies. He said that the industry was in need of consolidation [see ‘Comment’ below] and was likely to welcome the move.
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Peter Williams: “A logical fit” |
The Italian company, which owns HMSHost and co-owns Spanish travel retailer Aldeasa, this morning announced that it had bought a further 22.5 million shares in Alpha Airports Group at 110 pence a share, taking its total stake to 42.7%, or 75.1 million shares. Once it crossed the 30% threshold it was obliged to launch a full takeover under UK stock market regulations.
The company said it would make a full offer for the rest of the stock at the same price. Autogrill said in this morning’s statement: “As a result of the acquisition, and as required under Rule 9 of the City Code, it will be making a mandatory offer to all remaining Alpha Airports shareholders to acquire their shares at the same price of 110 pence per share in cash.”
Under the terms of the offer, Alpha Airports shareholders will retain the right to receive the final dividend of 1.25 pence per Alpha Airports share for the year ended 31 January 2007, announced on 27 March 2007.
The companies said in a statement: “Together Alpha Airports and Autogrill will significantly enhance the diversity of offerings and quality of services to people on the move, and the airlines and airports which serve them. In particular, Autogrill’s experience and know how in airport food, beverage and retail will complement and
expand the current portfolio of Alpha Airports, while the airline catering business can provide a new opportunity for Autogrill, leveraging the know how of Alpha Airports.”
COMMENT
Peter Williams describes the takeover as a “logical fit”. He’s right. As we mentioned last week Alpha brings to Autogrill a wide range of broadly complementary duty free retailing activities in the UK, US, India and Sri Lanka. It also consolidates the Italian company’s airport catering business in a number of key markets.
India looks particularly interesting. Aldeasa, in which Autogrill holds 50%, had signalled its ambitions in India by securing a joint venture partnership with government-owned retailer India Tourism Development Corp (ITDC), an alliance that has already reaped dividends by winning the duty free tender at Mumbai Chatrapati Shivaji International Airport. ITDC has extensive retail interests across many of India’s airports.
The acclaimed Paul Topping-run Alpha Asia operation has duty free operations at Cochin and New Delhi airports in India and at Colombo in Sri Lanka. Jointly a Alpha/Aldeasa/ITDC link would create the most powerful player in one of the world’s most exciting travel retail markets.
Autogrill is clearly pleased about the major UK presence it has just secured. And elsewhere Alpha has catering operations at Amman Airport in Jordan where Aldeasa is the duty free retailer. Aldeasa has thrust into the North American duty free market with contract victories in Atlanta and Vancouver, while Alpha is strong in the US thanks to Rod Wiltshire’s well-respected operations at Orlando Sanford and Orlando International airports in Florida.
Alpha’s extensive airport catering business will also complement the activities of Autogrill and HMSHost. Whether Autogrill is so enamoured about Alpha’s flight catering business remains to be seen – but even that business is evolving in part towards a more retail-oriented concept that may appeal to the Italian acquisitor.
The Alpha management and employees can be pleased that the acquisition will be amicable and agreed, thus avoiding the considerable uncertainty that accompanies hostile or contested takeovers. With a committed parent that has an outstanding track record in the sector, the talented Alpha management line-up should be much better placed to drive one of travel retail’s most innovative players to new heights,
MORE COVERAGE OF THE ALPHA AIRPORTS GROUP STORY
Autogrill increases Alpha holding with additional 17.4% share purchase – 01/06/07
Autogrill “˜close’ to talks to buy Servair interest in Alpha – La Repubblica report – 31/05/07
Autogrill eyes Alpha Airports Group takeover after dramatic early morning raid – 30/05/07
