Elis shares drop after reported bid for US uniform supplier Vestis

(Reuters) – Shares in Elis fell 11% on Friday after Reuters reported, citing sources, that the French workplace supplies provider had approached Vestis, the former uniform rentals business of Aramark, with an acquisition offer.

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 should pressure the share price in the short term despite the attractiveness of the U.S. market.

“This announcement echoes the Berendsen takeover bid in 2017, a target for which the group had raised its bids several times and which the market considers to be overpaid, with Elis’s share price having only just returned to its level at the time,” Midcap Partners wrote in a research note.