he financial dogfight for Signature Aviation, the FTSE 250 company which once made parts for the Spitfire and now helps keep America’s executive jets airborne, took another dramatic twist today.
Rival bidders Blackstone and Global Infrastructure Partners called a truce to join forces, and together with Microsoft billionaire Bill Gates’s investment vehicle Cascade – which already holds a 19% stake – presented a joint offer to shareholders.
The deal will be worth $4.7 billion (£3.5 billion) in cash, around $100 million more than the standalone offer from GIP last month, which had previously been recommended by Signature’s board.
Backing the alliance’s fresh proposal at 411p a share, Signature chairman Sir Nigel Ruddit said it delivered “attractive and certain value”.
It will leave Gatwick Airport-owner GIP and Blackstone with 35% of the company’s shares each, while Cascade will up its stake to 30%.
Shares in Signature, which provides support services including fueling, ground handling and passenger lounges at most top US airports, had been trading at 265p prior to the takeover battle.
They soared to a high of 425p last month on investors’ expectations of a bidding war.
The price dipped 3% today, but at 413.7p they still remain above the 411p offer.
This suggests shareholders expect at least one further twist in the saga: perhaps another sortie from Carlyle, the private equity giant which made an initial bid late last year.
Approval is dependent on 75% of votes being in favour.
Sir Nigel told investors: “The resilient performance and strong financial position through the pandemic has enabled the Signature board to consider its future and evaluate this offer from a position of strength.
“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. “
Liberum analyst Gerald Khoo said: “This feels like a done deal. The two declared interested parties have come together, with the backing of the largest shareholder.”
Signature was founded in 1879 and originally named W. Wilson Cobbett Ltd.
It has since been through multiple rebrands and, as British Belting & Asbestos (BBA) made parts for Spitfires, Hurricanes and Typhoons during the Second World War.
Following several decades as the world’s largest supplier of car brake pads focus shifted back to aviation in the 1990s. It is now the world’s biggest operator of private-jet bases handling 1.6 million private flights every year.
The sector has weathered the pandemic better than commercial competitors as wealthy travelers showed increased appetite for private flights.
Gates, who this month publishes a book on the looming climate disaster, has long described using private planes as his ‘guilty pleasure.’
In 2014, he told an online Q&A: “Owning a plane is a guilty pleasure. Warren Buffett called his the Indefensible. I do get to a lot of places for Foundation work I wouldn’t be able to go to without it.”