France's Elis has bid for US uniform supplier Vestis, sources say

Elis SA

05/09/2024 17:23

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      Elis approached Vestis with acquisition offer, sources say
    

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      Vestis shares jump nearly 15% on the news
    

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      Vestis underperformed due to loss of key customers, shares
down
35% this year
    

  
 (Adds share movement in paragraph 4)
    By Anirban Sen and Milana Vinn
       Sept 5 (Reuters) - French workplace supplies provider
Elis SA  ELIS.PA  has approached Vestis  VSTS.N , the former
uniform rentals business of Aramark  ARMK.N , with an
acquisition offer, according to people familiar with the matter.
    Elis first approached Vestis, which has a market value of
about $3.3 billion, including debt, a few weeks ago, the sources
said, requesting anonymity as the discussions are confidential.
The terms of the offer could not be immediately learned. 
    There is no certainty that Vestis will agree to a deal with
Elis, the sources said. Another suitor could also approach
Vestis, and it's possible that no deal with any party is
reached, the sources added. 
    Vestis' shares jumped nearly 15% on the news on Thursday,
before trading was briefly halted. 
    Elis and Vestis did not immediately respond to requests for
comment. 
    Vestis has become an acquisition target after its recent
underperformance due to the loss of key customers led to a steep
decline in its share price. Its shares have shed about 35% of
their value this year, trailing the S&P 500 Diversified Support
Services Index  .SPLRCDSSR  which has risen about 17% during the
same period.
    Vestis' shares started trading last year after its tax-free
spin-off from food services firm Aramark was completed.  
    Activist investor Corvex Management, which is led by hedge
fund veteran Keith Meister, took a stake in Vestis after it
issued a profit warning following its first-quarter results. In
June, Vestis appointed Meister to its board of directors.
    Earlier this year, Vestis was hit with a class action
lawsuit by a shareholder who alleged that the company made
misleading statements on its growth forecasts that led to a $1
billion valuation hit for shareholders. 
    Elis, which has a market value of about 9.2 billion euros
($10.2 billion) including debt, is a provider of workplace
supplies, and offers maintenance services for uniforms. 

($1 = 0.9024 euros)

 (Reporting by Anirban Sen and Milana Vinn in New York;
Additional reporting by Anousha Sakoui in London; Editing by
Paritosh Bansal and Lisa Shumaker)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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