Menzies revives DX deal as City police drop investigation

The City of London police's economic crime directorate has dropped its investigation of DX Group after careful consideration, it was confirmed Friday, reviving prospects for a potential acquisition from John Menzies.

The AIM listed company was under preliminary investigation by London police following an allegation relating to its document exchange service for law firms and the public sector.

The company reviewed and made changes to internal business processes in this unit, which would be kept under review.

Last month the independent logistics and parcel distribution specialist operating proposed a merger with the distribution arm of the logistic group John Menzies for £40m in cash, and the issue of new ordinary shares representing 65% of the larger firm.

According to the Financial Times, Menzies said it was "considering its position" about selling its distribution arm to DX after it emerged the company was under police investigation.

But on Friday the board of John Menzies said a combination of DX and its distribution division "has strong strategic logic for all stakeholders and that the transaction represents an opportunity to deliver significant value".

It added: "Discussions between John Menzies and DX are ongoing and a further announcement will be made as and when appropriate."

DX, which traces its origins to the legal sector with a members' network that supplies the majority of the top legal firms within the UK, offers a service to correspond with 25,000 members across the UK and Republic of Ireland, and also caters to central and local government, banks and building societies, estate agents and accountants among others.

DX's shares were up more than 3% in 9.81p on Friday afternoon.