UniFirst Shares Rise Following Cintas Acquisition Offer News in WSJ
UniFirst Corporation (NYSE:UNF) shares rose by more than 30% today after reports from the Wall Street Journal indicated that Cintas Corporation (NASDAQ:CTAS) made a multibillion-dollar offer to acquire the uniform supplier. The proposed acquisition, which UniFirst has repeatedly rejected, values the company at approximately $5.1 billion, representing a significant premium over its recent market value.
Cintas's offer of $275 per share implies a premium of over 60% based on UniFirst's closing price of $169.33 on Monday, valuing the company at around $3.1 billion. According to the WSJ report, despite the substantial premium, UniFirst's board unanimously rejected the proposal, stating that it was not in the best interest of the company and its stakeholders.
The acquisition attempt is not new; Cintas previously made an offer in February 2022, proposing $255 per share, which represented a 43% premium at the time. However, since then, UniFirst's shares have depreciated by approximately 5%. With a market value exceeding $74 billion, Cintas has continued to pursue UniFirst and has even indicated in subsequent communications a willingness to raise its offer.
A successful deal for Cintas would mark its largest transaction to date, allowing it to expand its customer base and benefit from investments in cutting-edge technology and infrastructure. According to the company’s analysis, the deal would be positively received by investors, as 79% of UniFirst's common shares are held by Cintas shareholders.
Headquartered in Wilmington, Massachusetts, UniFirst specializes in providing uniforms and protective clothing to various industries. Cincinnati-based Cintas offers a range of products, including uniforms, mats, restroom supplies, and safety products. The potential acquisition would bring together two major players in the uniform supply sector.
At this time, UniFirst has not publicly commented on the details of the offer or the reasons for its repeated rejection. Cintas is expected to publicly disclose its offer soon. The market's reaction to the news indicates that, despite UniFirst's current stance, investors are anticipating a potential deal.