Berendsen fights back against 'high risk' French takeover
Laundry services group Berendsen has come out fighting against an unwanted takeover offer from France's Elis Services, saying a the proposal very significantly undervalues the company and would raise risks.
Berendsen
1,268.00p
17:09 11/09/17
FTSE 250
19,601.98
17:09 25/04/24
FTSE 350
4,434.34
17:09 25/04/24
FTSE All-Share
4,387.94
16:49 25/04/24
Support Services
10,523.75
17:09 25/04/24
In a statement on Wednesday the FTSE 250 group said Elis' proposal "fundamentally fails to reflect Berendsen's inherent value" as it proceeds with a £450m three-year investment plan, with £300m of this expected will add an equivalent adjusted operating profit of £45m.
As well as reiterating its 2017 adjusted operating profit forecast of £150m, Berendsen said its growth plans would see profits grow to roughly £170m in 2018.
Management added that the bid was "highly opportunistic" as it came at a time when Elis' shares were near long-term highs, while Berendsen's were depressed - although several analysts have put this squarely at the feet of management.
However, the board believe that business "is at a point of inflection and that selling Berendsen on the terms offered by Elis would deprive Berendsen's shareholders of the full benefit that will accrue from the delivery of its strategy".
The British company also warned the combined business would have "significantly higher leverage", with the French company's net debt/EBITDA ratio more than double its own, and that a combination "would significantly increase risks for Berendsen's shareholders" as the French company has not previously acquired a business of such scale and complexity.