(Reuters) -Elis said on Friday it had made a preliminary approach to U.S. uniform supplier Vestis about a potential acquisition, confirming a Reuters report that prompted the French workplace supplies provider’s shares to tumble 16%.
Elis added in a statement that “there can be no assurance that these discussions will result in the signing of a transaction” or any other agreement.
Reuters had reported, citing sources, that Elis had approached the former uniform rentals business of Aramark, with an acquisition offer.
Elis stock was one the biggest faller on the pan-European STOXX 600 index on Friday, and was on track for its steepest one-day decline in four and a half years.
Vestis, valued at $3.3 billion on the stock market, has become an acquisition target after recent underperformance due to the loss of key customers.
Midcap Partners analysts said the reported approach echoed Elis’s 2017 Berendsen takeover in which it repeatedly raised its bid and was seen as overpaying, and could pressure the share price in the short term despite the attractiveness of the U.S. market.
(Reporting by Dagmarah Mackos and Gianluca Lo Nostro in Gdansk; Editing by Milla Nissi, Jan Harvey and Emelia Sithole-Matarise)
