Yahoo Finance Major investor backs besieged Berendsen over £2bn bid
Bosses at under-siege laundry giant Berendsen have received a boost after a leading investor in the British company backed their decision to spurn a £2bn bid from French rival Elis.
Berendsen’s board, led by chairman Iain Ferguson, has rejected an £11.73-a-share cash-and-paper offer from Paris-based Elis on the basis that it “very significantly undervalues” the business, a provider of laundry and cleaning services to customers including the NHS.
The British company, which is trying to revive its fortunes after two profit warnings since October, last week sought to strengthen its defences against the French predator by hiking its forecast for adjusted operating profit next year to £170m, which is £20m more than it expects this year.
In a fillip to Berendsen, a top 10 shareholder in the company has told the Sunday Telegraph that Elis’s bid did not take account of the progress that management has made in reviving the company’s fortunes.
“There’s a definite sense in putting the two business together but I can understand why they haven’t chosen to engage at the moment because the level of the bid is not compelling,” he said.
“I think there is some evidence that the company is turning itself around so that would have to be reflected in the valuation that you took the business out on.”
Berendsen has already outlined a three-year, £450m investment plan to help drive a recovery.
The fund manager added that the strong wording of Berendsen’s rejection suggested that Elis would have to improve its offer by at least 10pc for the British company to start negotiations.
Elis made an initial approach last month, pitched at £11 a share. Berendsen stock closed at £10.92 on Friday.
Under Takeover Panel rules, the French firm has until June 15 to make a firm offer or walk away.
