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Berendsen (BRSN) is today’s winner, +8.4% after agreeing to a revised £2.2bn offer from French workwear rental and laundry service competitor Elis (ELIS).
As suggested 18 May, previous rebuffs merely served to extend the M&A tango and encourage a third bid. As expected, BRSN has successfully eked out a better offer for shareholders. The latest 45% premium to the undisturbed share price (up from 36-40% previously) is now well above the traditional 25-30% but almost certain to be the final offer. As we said in May, “three strikes and you’re out”.
Interestingly, while we believed previous offers were deemed ‘opportunistic’ on account of the company being in investment mode and GBP weakness versus EUR making the deal more favourable for the French company, the currency has gone even further south since. So perhaps it was always more about getting closer to 1200p. The adjustment to the cash + share offer to include more cash (540p vs 440p prev) and less new shares (0.403 vs 0.426 prev), and thus less diluted ownership of the new entity, has clearly sweetened the deal sufficiently. Also being entitled to an 11p dividend surely helps too.
Off their best having ventured as high as 1219p (fresh 2017 highs), the shares have closed the gap-down amid last October’s profits warning.
After a busy couple of months for BRSN, has it finally cleaned up for shareholders?
Mike van Dulken, Head of Research, 8 Jun 2017
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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