(Reuters) – Food service group Elior is discussing a possible merger with its largest shareholder Derichebourg as it seeks to shore up its balance sheet amid strong inflationary pressures, Bloomberg reported on Wednesday.
A spokesperson for Elior declined to comment. No representative of Derichebourg could be reached immediately.
Elior on Wednesday announced a third annual loss since the start of the COVID-19 pandemic, as the group suffered from difficult contract renegotiations in its home market of France.
Group CEO Bernard Gault said Elior was close to finalizing its strategic options in the coming weeks.
“The review of strategic options announced on July 4 should be completed in the coming weeks. The Board of Directors is finalizing the examination of several scenarios with a view to choosing the one that will optimize the group’s strategic positioning and improve its financial situation”, added he said in the results release.
According to Bloomberg, the merger would see Derichebourg transfer assets to Elior in exchange for an increase in its stake to some 24% of the capital.
Derichebourg increased its stake in Elior to 19.6% this year, becoming the group’s largest shareholder.
Elior is also exploring other options among which a capital increase or the sale of units in countries such as Italy or the United Kingdom, adds Bloomberg, specifying that no decision has been made and that the plans could still change.
Also according to Bloomberg, Derichebourg does not intend to make an offer for the entire group if the merger materializes.
(Written by Sudip Kar-Gupta, Dagmarah Mackos and Mrinmay Dey; French version Jean-Stéphane Brosse)
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