Derichebourg’s investment in Elior calls out in more ways than one. This is illustrated very well by the 15% plunge in the share price, following this announcement. In a statement released this morning, Daniel Derichebourg welcomes an agreement signed with the holding company of Elior’s founder, Robert Zolade, whereby his company will buy 14.7% of Elior’s capital on the basis of a of EUR 5.65 per share. Price which could rise to 7 EUR per share depending on the evolution of the share price by 2024. Derichebourg already held 4.9% of Elior, of which it will soon become the largest shareholder with 19.6% of the round. But the investor was careful to specify that he does not intend to launch a takeover bid.
Since the start of 2020 and the Covid episode, Elior has been at its worst
“This operation seems surprising to us. No complementarity exists between the two groups and it is done a priori on a high price basis“, underlines Nicolas Montel, who follows the file at Portzamparc. The analyst expected this morning to have a contact with the management for”better understand the logic of this participation“.
Because beyond the label “business services” displayed by the two groups, they do not have much in common (except perhaps a closing date shifted to September 30). Derichebourg, which capitalized just over €1.5 billion before today’s episode, carries out two-thirds of its activities in the environment and the rest in maintenance, concierge or surveillance type supports. At Elior, catering is the core business with around 90% of the activity, at least when the covid does not upset the situation. The balance is generated by services similar to those of Derichebourg: cleanliness, reception, etc. The activities therefore overlap at the margin.
The financial year ending September 30 will be much more favorable for Derichebourg than for Elior
The sale by Robert Zolade, 81, of some of his titles does not really surprise those familiar with the matter. The identity of the buyer, it will be understood, is more surprising, especially since he pays the transaction at a high price (Elior shares were quoted at 3.03 EUR before the announcement), to end up with less of 20% of the capital and two administrators. “The transaction price looks very promising for Elior and demonstrates Derichebourg’s confidence in Elior’s rebound. However, this enthusiasm could be partially offset by market concerns following the release of Zolade.“, notes Yi Zhong, the AlphaValue analyst who follows Elior.
What thrills investors a little at Derichebourg is its exposure to the recycling market in Europe, of which it is considered to be one of the natural consolidators. The activities in the services would be almost anecdotal and an enlargement towards the difficult profession of collective catering does not have many supporters in the financial community. In other words, the management of Derichebourg did not score points with this surprise transaction considered expensive paid. Hopefully this won’t distract senior leaders from their strategy.