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Exclusive-France's Elis has bid for US uniform supplier Vestis, sources say
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Exclusive-France's Elis has bid for US uniform supplier Vestis, sources say
Sep 5, 2024 9:40 AM

(Reuters) -French workplace supplies provider Elis SA has approached Vestis ( VSTS ), the former uniform rentals business of Aramark ( ARMK ), with an acquisition offer, according to people familiar with the matter.

Elis first approached Vestis ( VSTS ), 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 ( VSTS ) will agree to a deal with Elis, the sources said. Another suitor could also approach Vestis ( VSTS ), and it's possible that no deal with any party is reached, the sources added.

Vestis' ( VSTS ) shares jumped nearly 15% on the news on Thursday, before trading was briefly halted.

Elis and Vestis ( VSTS ) did not immediately respond to requests for comment.

Vestis ( VSTS ) 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' ( VSTS ) shares started trading last year after its tax-free spin-off from food services firm Aramark ( ARMK ) was completed.

Activist investor Corvex Management, which is led by hedge fund veteran Keith Meister, took a stake in Vestis ( VSTS ) after it issued a profit warning following its first-quarter results. In June, Vestis ( VSTS ) appointed Meister to its board of directors.

Earlier this year, Vestis ( 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)

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