World's biggest private jet provider agrees $4.6bn takeover

LaToya Harding
·Contributor
·3 min read
A passenger aircraft, with the full "Harvest Moon" seen behind, makes its final approach to landing at Heathrow Airport in west London, September 19, 2013. The Harvest Moon is a traditional name for the full moon that is closest to the autumn equinox, and at a traditional period where farmers would be harvesting crops. The moon's rise time and angle of path give the illusion that the Harvest Moon is both closer, larger and brighter; though actually it is not. REUTERS/Toby Melville (BRITAIN - Tags: TRANSPORT SOCIETY TPX IMAGES OF THE DAY)
Signature has a network of refuelling and maintenance bases across the UK. It is the largest fixed-base operator in the world. Photo: REUTERS/Toby Melville

Signature Aviation (SIG.L), the world’s largest operator of private jet bases, received a boost from investors on Monday after it agreed a $4.6bn (£3.4bn) buyout deal from Global Infrastructure Partners (GIP).

The London-listed company, which was formerly known as BB Aviation, received a cash offer at $5.50 per share, representing a 51% premium of its closing price the day before it first received a takeover offer on 16 December.

It values the company at around $4.6bn.

GIP, one of Gatwick airport’s owners, said it believes “there are a number of features of the Signature business which make it attractive for an infrastructure investor with a strong and demonstrable operational capability.”

However, Adebayo Ogunlesi, the chairman and managing partner of GIP, said: “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.”

The bid was ahead of the $5.15 per share offered last week by Microsoft owner Bill Gates, the company’s top shareholder. Gates owns 19% of the private jets provider.

Signature surged more than 8% on Monday on the back of the news. Chart: Yahoo Finance
Signature surged more than 8% on Monday on the back of the news. Chart: Yahoo Finance

Private equity group Blackstone also made a counter-offer for the FTSE 250 (^FTMC) aviation firm, as well as rival group Carlyle.

The news sent shares more than 8% higher.

Sir Nigel Rudd, chairman of the board at Signature, said: “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.

“The resilient performance and strong financial position through the pandemic has enabled the Signature directors to consider its future and evaluate this offer from a position of strength.”

Signature has a network of refuelling and maintenance bases across the UK. It is the largest fixed-base operator in the world.

During the Second World War it made its name making parts for Spitfire and Hurricane aircraft. It also made the first brake pads for Jaguar cars and transmission linings for Ford's Model T.

READ MORE: Aircraft orders slump as travel industry struggles continue

The news comes as the UK aviation sector has nosedived thanks to the global spread of the coronavirus pandemic. A string of foreign firms have circled vulnerable British rivals that have seen their value plummet since the outbreak.

Britain’s busiest airport said on Monday that it saw passenger numbers slump 73% during 2020, as COVID-19 restrictions all but shut down the travel industry.

For December alone, passenger numbers at Heathrow plummeted 83% as fear about the new strain of COVID-19 meant countries shut their borders to the UK. Alongside this, millions of people were forced to cancel Christmas travel.

The approval of the first vaccines in November was perceived to be a turning point for the industry, but the complication of new, more transmittable strains of the virus has lead to further groundings.

Figures from November show the International Air Transport Association (IATA) expects a net loss of $118.5bn (£87.6bn) for the industry in 2020. Airlines are expected to lose another $38.7bn in 2021.

Watch: How does England feel about about a third lockdown?