Laundry group Elis agrees £2.2bn deal for UK’s Berendsen 09 Jun 2017

Elis, the French laundry services group, has reached a preliminary agreement ‘in principle’ to take over its UK rival Berendsen in a £2.2bn deal.

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Berendsen has repeatedly turned down offers from Elis, most recently a £2bn deal in May. Berendsen had argued that Elis was trying to buy the company when its share price was artificially low because of its difficulties over the past year.

In May they had said that the initial offer from Elis “very significantly undervalues” the company and the management of Berendsen “does not see the basis for any further discussions with Elis”.

But discussions did continue and Berendsen said this week that its board would “recommend unanimously” the revised deal to its shareholders, subject to due diligence.

Jane Sparrow, analyst at Barclays, argued in a note last month that the rationale behind the Elis deal was sound: “The proposal makes geographic sense to us with Berendsen strong in UK and Scandinavia, and Elis strong in France.”

She added there would be opportunities for synergies in the Benelux region and the opportunity to build scale in Germany and the deal was “worthy of consideration” by Berendsen.

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