John Menzies confronts activist investor (A)
Case Study

John Menzies confronts activist investor (A)

2 pages
November 2019
Reference: IMD-7-2124

John Menzies Plc is a publicly listed company operating in the two unrelated and non-synergistic business divisions of newspaper distribution (only in the UK) and ground and cargo handling (second largest player in the world). Menzies Aviation, provides services to the international airline sector. This unusual corporate structure combines a fast-growing business, namely Menzies Aviation, with a business that is fighting with the structurally declining market of newspaper distribution, namely Menzies Distribution. In April 2015, Ian Napier, the Chairman of the Board of John Menzies Plc had just been approached by Lakestreet Capital Partners AG, an activist investment firm who called for a change in the company and wanted to split the two business areas. It was not the first time John Menzies had been targeted by an investment firm, however due to poor financial results and a decreasing share price, the pressure had increased. The case describes Ian Napier´s dilemma on what to do and how to respond. Is a break-up of John Menzies Plc when the activist shareholder Lakestreet Capital Partners AG called for it publicly truly in the best interest of John Menzies Plc shareholders? Could it also be the case that the corporate structure of John Menzies Plc has its merits? After all, Chairman Iain Napier said at the 2015 Annual General Meeting that the strong cash generation in the distribution business helps to support the expansion and investment needed in the fast-growing aviation arm.

Learning Objective

This case can be used to cover management & corporate governance, strategy & value creation, and leadership & communication. To understand:

  1. The role of the Board of Directors vs. activist investors. How an activist investor can play a positive role in the governance system.
  2. The role/fiduciary responsibilities of the Board. If good corporate governance was followed.
  3. How the Board of Directors and Lakestreet Capital Partners AG (or shareholder activists in general) may have common interests. What the conflicts could be.
  4. The strategic pros/cons of a conglomerate. Strategic short vs long term value creation.
Keywords
Strategy, Management, Value Creation, Corporate Governance
Settings
United Kingdom
John Menzies, Airlines and Aviation, Freight and Cargo Transportation
2014 - 2018
Type
Published Sources
Copyright
© IMD 2019
Language
English
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre, UK Office

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Fax +44 (0)1234 751125
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

The Case Centre, US office

Babson College

Babson Park, Wellesley MA 02457, USA
Tel +1 781 239 5884
Fax +1 781 239 5885
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Looking for something specific?
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics