RBC Capital is “not surprised” Sodexo (SDXAY) is reportedly looking to acquire Aramark (ARMK) post the recent de-mergers by both companies of non-core assets. An enlarged Sodexo would have a more attractive geographic and sectoral mix, as well as enhanced purchasing power, the analyst tells investors in a research note. However, the firm says dis-synergies and antitrust hurdles are a risk and notes investors have generally responded poorly to large scale business services acquisitions. RBC continues to prefer Outperform-rated Aramark in this scenario and sees downside risk in Sodexo shares on the news.
Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
Read More on SDXAY:
- Sodexo deal for Aramark would approach ‘merger of equals,’ says Jefferies
- Citi says possible Sodexo, Aramark deal ‘unlikely to progress’
- Sodexo exploring potential takeover of Aramark, Bloomberg reports
- Sodexo price target lowered to EUR 98 from EUR 99 at Citi
- Sodexo price target lowered to EUR 85 from EUR 88 at JPMorgan