Berendsen surges as it agrees to £2.2bn takeover by France's Elis

Berendsen surged on Thursday as it agreed to a sweetened takeover offer from French peer Elis valuing the London-listed commercial laundry company at £2.2bn.

The offer values each Berendsen share at £12.50, excluding the interim dividend and consists of around 43% in cash, with the remaining 57% being satisfied by the issuance of new Elis shares.

Elis said it is intending to offer a mix and match facility to all Berendsen shareholders under which they may elect, subject to availability as a result of elections made by other Berendsen shareholders, to vary the proportions in which they receive new Elis shares and cash in respect of their holdings.

The price represents a premium of around 45% to Berendsen's closing price of £8.64 on 17 May, which was the last business day before Elis made its initial proposal. Berendsen's board expects to unanimously recommend that shareholders accept the offer.

The company had dismissed Elis's previous offer as opportunistic.

"The board believes Elis is making an opportunistic attempt to acquire Berendsen whilst it is implementing its capital investment programme, without reflecting the value upside inherent in this strategy. The board believes this value should accrue fully to Berendsen shareholders alone,” it said in a statement mid-May.

RBC Capital Markets said: "We see this as an excellent price for shareholders, given the valuation versus peers (a very full 22x PE, 18x EV/EBITA) and the execution risks of the recovery programme at standalone Berendsen. We would urge shareholders to accept the bid."

At 0943 BST, the shares were up 8.3% to 1,199p.