Scotland business

John Menzies 'considering position' amid DX police probe

Menzies Distribution staff Image copyright Menzies Distribution

John Menzies has said it is "considering its position" after the logistics firm with which it is close to completing a merger deal announced it was being investigated by police.

DX Group said police had launched a preliminary investigation centred on its DX Exchange operations, after "an allegation" was made against the group.

DX said it was "co-operating fully" with the police.

It comes as the two firms close in on a planned merger of distribution arms.

In a stock market announcement, DX said: "The board of DX announces that it has been notified by the City of London Police Economic Crime Directorate of an allegation that has been made against the company which has resulted in the commencement of a preliminary investigation centred on the DX Exchange operations.

"The investigation is at a very early stage. The board of DX received the details of the allegation on 7 June 2017 and is co-operating fully with the City of London Police.

"A further announcement will be made when appropriate."

'Considering position'

Reacting to the news, Edinburgh-based Menzies said: "The board of John Menzies plc notes the announcement made this morning by DX (Group) plc.

"The board of John Menzies is considering its position and will make a further announcement as and when appropriate."

This week an activist investor at DX ended its opposition to the proposed merger between DX and Menzies' distribution unit, after the companies agreed revised terms.

Gatemore Capital Management had threatened to block the original deal unless it was "markedly improved".

Under a revised deal, DX agreed to buy Menzies Distribution for £40m in cash and issue new ordinary shares representing 65% of the enlarged firm.

At the time of that announcement, both companies said they expected the transaction to be completed during the summer.

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