The U.S.-based UniFirst Corp. (UNF) has reportedly rejected the takeover offer from France’s Elis SA (FR:ELIS). According to Bloomberg, Elis reached out to UniFirst following its public takeover bid for rival Vestis Corp. (VSTS) last month. Elis shares gained 1.31% on Thursday after the news, whereas UniFirst and Vestis lost 1.41% and 2.09%, respectively.
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Elis SA is a French company that provides rental and maintenance services for professional clothing. Meanwhile, UniFirst and Vestis are U.S.-based suppliers of workplace uniforms and other supplies.
Elis Faces Setback Amid Vestis Negotiations
Elis’ move to acquire Unifirst is its second attempt to pursue an acquisition in the American market. In early September, Reuters reported that Elis offered to acquire Vestis.
Vestis has emerged as an acquisition target following a significant drop in its share price due to recent underperformance, driven by the loss of key customers. Year-to-date, Vestis stock has lost 30% in trading.
Nonetheless, Elis and Vestis are continuing to engage in preliminary discussions regarding a possible agreement. Bloomberg stated that after the news of Elis’ interest in Vestis, Vestis has garnered interest from additional entities, including private equity firms. The negotiations are still in the preliminary phase, and discussions with Elis and other parties may not result in a finalized agreement.
Berenberg Bank Retains Buy Rating
Elis shares have dropped over 18% in the last month amid the acquisition saga. Nonetheless, analysts maintain an optimistic outlook on the stock.
Last month, Berenberg Bank confirmed its Buy rating on ELIS stock with a forecast of 40.6% upside potential. Analyst Christoph Greulich from Berenberg believes Elis’ stock has been overly punished by the market in response to the acquisition news. He further stated that the shares present a growth opportunity as investors await more clarity on its acquisition, considering the potential earnings boost from any deal.
What Is the Share Price Target for Elis Stock?
According to TipRanks, ELIS stock has received a Strong Buy rating, backed by three Buys and one Hold recommendation. The ELIS share price target is €24.62, which implies 33.17% upside from the current trading level.
