Elis's Bid for UniFirst: A Setback Amidst Vestis Talks

Elis SA, the Paris-listed provider of uniform and linen cleaning services, has made an informal takeover proposal to US peer UniFirst Corp., according to people familiar with the matter. However, UniFirst's board recently rejected the proposal, creating a setback for Elis as it continues talks with another US company, Vestis.

Elis initially approached UniFirst after the latter's takeover approach to rival Vestis became public last month. The French company made a non-binding proposal for UniFirst, whose board subsequently rejected it. The companies are not currently in talks, and it remains to be seen whether Elis will revise its interest in UniFirst, valued at $3.7 billion.

Meanwhile, Elis and Vestis are still holding exploratory talks about a potential deal. Vestis, which has a market capitalization of $1.9 billion, has attracted interest from other parties, including private equity firms. The company is working with advisers to assess the situation, with options including staying independent and a sale. Deliberations are early stage, and talks with Elis and other parties may not lead to a transaction.

Elis's pursuit of US acquisitions is part of a broader trend of French M&A appetite for expansion in the US. Paris-listed catering firm Sodexo SA has been exploring a potential acquisition of US rival Aramark, while French dairy companies Groupe Lactalis and Sodiaal agreed to buy General Mills Inc.'s North American yogurt business for $2.1 billion last month.

Elis's bid for UniFirst, while rebuffed, highlights the company's interest in expanding its presence in the US market. As talks with Vestis continue, Elis may consider other strategic moves to further its expansion goals. The outcome of these negotiations will have significant implications for both Elis and the broader US uniform and linen services industry.