Gates Backs Blackstone’s $4.3 Billion Bid for Jet-Base Operator
(Bloomberg) -- Bill Gates joined the battle for Signature Aviation Plc, allying with Blackstone Group Inc. in a $4.3 billion approach for the world’s biggest operator of private jet bases.
Gates’s Cascade Investment LLC, the biggest shareholder in Signature Aviation, and Blackstone are in advanced discussions with the London-based firm on a cash offer of $5.17 per share, they said Friday in a statement. Signature had said in December it would accept a bid from Blackstone if a firm proposal were made at that level.
The involvement of Gates means Blackstone becomes the firm favorite to purchase Signature after Carlyle Group Inc. said Thursday it was also considering a potential offer. A third suitor, Global Infrastructure Partners, said in December that it was considering its options after its lower bid was rejected.
Shares of Signature were down 2.5% at 4:12 p.m. in London as prospects for a bidding war faded. The stock was trading at 407.50 pence ($5.53), still above the offer mooted by Blackstone.
Private flying is one of the few travel sectors to have benefited from the coronavirus pandemic, offering the well-heeled the opportunity to continue traveling while minimizing potentially risky contact with other passengers.
The Blackstone consortium now has to work toward submitting a formal offer ahead of a Jan. 14 regulatory deadline. It’s planning to structure the deal as a scheme of arrangement, a method requiring 75% of voting shareholders to be in favor.
The involvement of Gates, who owns 19% of Signature Aviation, makes it difficult for rival suitors to propose a deal capable of reaching that threshold. Other bidders could still use a different structure requiring just over 50% of investors to approve, though they would run the risk of not acquiring a large enough stake to take the company private.
Under the Blackstone plan, Microsoft Corp. founder Gates would contribute his shareholding and top it up with cash to become a 30% owner. Blackstone owns 70% of the bidding entity.
Signature, which changed its name from BBA Aviation last year, traces its origins to a Scottish industrial company founded in 1879. It’s had several names since and has focused on private aviation in recent years, selling parts distributor Ontic last year for $1.4 billion.
The company has also made several acquisitions, buying rival Landmark Aviation for $2.1 billion from Carlyle in 2016, and acquiring Epic Fuels for $88 million in 2018. Gates became an investor in 2009 and holds his stake through Cascade Investment LLC.
Signature had become a more likely takeover target since simplifying and selling its Ontic unit, according to Citigroup Inc. analyst Charles Mortimer.
Carlyle is working with Bank of America Corp. and Morgan Stanley on its approach, people familiar with the matter said, asking not to be identified because the information is private. Representatives for Carlyle and the banks declined to comment.
Signature confirmed the Carlyle approach and set Feb. 4 as a deadline for a firm offer. GIP’s deadline to submit a formal proposal is Jan. 14.
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