Blackstone in talks with personal jet group Signature Aviation over £3bn deal

Blackstone is in talks with Signature Aviation a couple of attainable takeover bid that might worth the UK personal jet firm’s fairness at greater than £3bn, with the buyout group seeing a possibility after its share value tumbled through the pandemic.

The US personal fairness group’s provide of $5.17 per Signature share is equal to £3.83, a 42 per cent premium to the earlier closing value the FTSE 250 firm mentioned on Thursday. The transfer is a guess on rising demand for personal jets, for which the corporate gives bases and companies.

Signature additionally mentioned it had rejected a rival method at a cheaper price from World Infrastructure Companions.

Shares surged simply over 40 per cent to £3.75 following information of Blackstone’s curiosity. Earlier than the announcement, that they had fallen 15 per cent because the begin of the yr to £2.68.

There is no such thing as a certainty {that a} deal will happen, the corporate mentioned. Blackstone declined to remark and GIP didn’t instantly reply to a request to remark.

Signature, previously often known as BBA Aviation, traces its historical past to a small industrial firm fashioned within the late 19th century in Scotland. It streamlined to concentrate on the aviation market and over the previous 15 years has concentrated solely on the booming personal jet trade. 

The corporate final yr mentioned it will focus on its floor dealing with enterprise following the sale of a division servicing ageing plane to personal fairness group CVC Capital Companions for $1.37bn. The corporate additionally put its engine restore enterprise up on the market final yr, though it has but to discover a purchaser.

Now the most important fixed-base operator within the personal jet trade, analysts mentioned the corporate has lengthy been considered a possible takeover goal. “Whether or not or not Signature is enticing to personal fairness is just not a brand new debate available in the market,” analysts at HSBC mentioned lately.

The personal jet trade was not resistant to the near-total grounding of world plane through the first wave of the pandemic however the trade has been in a position to bounce again faster than many industrial airways with rich clients prepared to pay for flights that permitted higher social distancing.

Whereas the marketplace for company journey continues to be subdued, personal jet corporations have as an alternative reported a surge in first-time and leisure customers through the pandemic.

Signature’s first-half underlying working revenue fell 60 per cent to $63.1m, however in a buying and selling replace in November the corporate mentioned flight exercise had stabilised to about 80 per cent of the earlier yr’s ranges.

Takeover talks are with Blackstone’s infrastructure fund and its so-called “core” fairness fund, Signature mentioned. These autos can spend money on corporations for longer than the 10-year lifespan of its personal fairness funds, with decrease return expectations.

The announcement of the talks units the clock ticking beneath UK takeover guidelines, which means that Blackstone and GIP should announce a agency intention to bid, or stroll away, by January 14, though this deadline might be prolonged.