Unifirst Soars 17.7% on Cintas' $275/Share Bid—Is This the Catalyst for a $5.2B Takeover?

Summary
• Unifirst (UNF) surges 17.69% to $200.26, hitting a 52-week high of $218.52
• Cintas (CTAS) reiterates $275/share all-cash offer, a 64% premium to 90-day average price
• Options volatility spikes with 20 contracts trading at 39%–72% implied volatility
• Sector leader Cintas (CTAS) gains 2.22% as merger speculation intensifies

Unifirst’s intraday rally has been fueled by Cintas’ renewed $275/share takeover proposal, which values the company at $5.2 billion. The stock’s 17.69% surge—its largest single-day move in over a decade—reflects investor optimism about regulatory clarity and a potential $350 million reverse termination fee. With the stock trading near its 52-week high of $243.70, the market is pricing in a high probability of deal completion despite UniFirst’s silence since December 16.

Cintas' $275/Share Bid Ignites Takeover Premium
The explosive move in UNF stems directly from Cintas’ non-binding $275/share cash offer, which represents a 64% premium to UniFirst’s 90-day average price of $168.75. This all-cash proposal, first made in 2022, has gained renewed urgency as Cintas highlights its $350 million reverse termination fee and regulatory readiness. The stock’s 17.69% intraday gain—surpassing its 52-week high—reflects market anticipation of a definitive agreement, particularly after Cintas emphasized its confidence in navigating antitrust hurdles with legal counsel Davis Polk & Wardwell. With UniFirst’s board yet to respond, the price action suggests investors are pricing in a high likelihood of a premium being paid.

Uniform & Facility Services Sector Awaits Regulatory Clarity
Options Volatility and ETF Positioning Signal High Conviction
• MACD: 2.99 (Signal Line: 4.14, Histogram: -1.16) – Bearish divergence
• RSI: 34.72 – Oversold territory
• Bollinger Bands: $163.70 (Lower) vs. $186.35 (Upper) – Price near upper band
• 200D MA: $175.45 (Below current price)
• Support/Resistance: 30D: $177.04–$177.63; 200D: $173.82–$175.01

UNF’s technical profile suggests a short-term overbought condition, with RSI at 34.72 indicating potential for a pullback. However, the stock’s proximity to its 52-week high and Cintas’ regulatory confidence create a bullish bias. For options traders, the UNF20260116P185 and UNF20260116P200 contracts stand out:

• UNF20260116P185
- IV: 47.09% (Moderate volatility)
- Delta: -0.235 (Moderate sensitivity)
- Theta: -0.0829 (High time decay)
- Gamma: 0.0122 (Moderate price sensitivity)
- Turnover: $11,025 (High liquidity)
- Leverage Ratio: 54.18% (Strong upside potential)
- Price Change Ratio: -1.96% (Recent stability)
- Payoff at 5% Upside: $200.26 → $210.27 → max(0, $210.27 - $185) = $25.27/share
- Why: High IV and leverage ratio position this put for a controlled downside if the bid faces regulatory delays.

• UNF20260116P200
- IV: 69.03% (High volatility)
- Delta: -0.453 (Strong sensitivity)
- Theta: -0.1428 (Very high time decay)
- Gamma: 0.0107 (Moderate price sensitivity)
- Turnover: $4,210 (High liquidity)
- Leverage Ratio: 14.12% (Moderate upside)
- Price Change Ratio: -4.70% (Recent stability)
- Payoff at 5% Upside: $200.26 → $210.27 → max(0, $210.27 - $200) = $10.27/share
- Why: High IV and delta make this put ideal for a sharp correction if the board rejects the bid.

Aggressive bulls should consider UNF20260116P185 into a $190 break, while cautious traders may short UNF20260116P200 if the stock consolidates below $195.

Backtest Unifirst Stock Performance
The backtest of UNF's performance after an 18% intraday surge from 2022 to the present shows mixed results. While the stock experienced a maximum return of 0.56% over 30 days, the overall trend was negative, with an average return of -0.05% over 3 days and 0.18% over 10 days. The win rates for 3, 10, and 30 days were 47.97%, 49.77%, and 50.90%, respectively, indicating that the stock had a higher probability of positive returns in the short term but faced challenges in maintaining those gains.

Takeover Premium or Regulatory Hurdle? Watch for Board Response by December 16
The $275/share bid has created a binary outcome for UNF: either a premium is paid, or the stock reverts to its intrinsic value. With Cintas offering a $350 million reverse termination fee and regulatory readiness, the market is pricing in a high probability of a deal. However, UniFirst’s silence since December 16 introduces uncertainty. Investors should monitor the board’s response by the December 16 deadline and watch for a breakdown below $195, which could trigger a short-term selloff. Meanwhile, sector leader Cintas (CTAS) is up 2.22%, signaling continued confidence in the merger’s strategic logic. For now, the path of least resistance is higher, but regulatory clarity remains the key catalyst.