Elis SA, the French workplace supplies provider, has approached Vestis (NYSE: VSTS), the former uniform rentals business of Aramark, 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 couldn’t 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 (NYSE: VSTS) shares jumped nearly 15% on the news on Thursday, before trading was briefly halted. Elis shares fell 9.6% at the open on Friday after the Reuters report.
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 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.
Hedge fund veteran Keith Meister, who leads activist investor Corvex Management, 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 (NYSE: VSTS) 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)
(Source: Reuters)
