Investing.com -- Shares of UniFirst Corporation (NYSE:UNF) soared over 30% today following reports from the Wall Street Journal that Cintas Corporation (NASDAQ:CTAS) has made a multi-billion dollar offer to acquire the uniform supplier.
The proposed takeover bid, which UniFirst has repeatedly declined, valued the company at approximately $5.1 billion, a significant premium over its recent market value.
Cintas's offer of $275 per share represents a more than 60% premium to UniFirst's closing price on Monday, when shares ended at $169.33, valuing the company at around $3.1 billion. The WSJ report said that despite the substantial premium, UniFirst's board has unanimously rejected the proposal, stating that it is not in the best interest of the company and its stakeholders.
The acquisition attempt is not new; Cintas had previously shown interest in February 2022 with an offer of $255 per share, a 43% premium at the time. However, UniFirst shares have since decreased by approximately 5%. Cintas, with a market value exceeding $74 billion, has continued to pursue UniFirst, even indicating a willingness to raise its offer in subsequent communications.
For Cintas, a successful deal would be its largest transaction to date, allowing it to expand its customer base and leverage recent investments in technology and infrastructure. The company's analysis suggests that the deal would be favorably received by investors, with 79% of UniFirst's common shares also held by Cintas stockholders.
UniFirst, headquartered in Wilmington, Massachusetts, specializes in providing uniforms and protective clothing across various industries. Cintas, based in Cincinnati, offers a range of products including uniforms, mops, restroom supplies, and safety items. The potential acquisition would combine two significant players in the uniform supply industry.
As of now, UniFirst has not publicly commented on the specifics of the offer or its reasons for the repeated rejections. Cintas is expected to disclose its proposal to the public soon. The market's reaction to the news reflects investor anticipation of a possible agreement despite UniFirst's current stance.
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