UniFirst Corp. (NYSE:UNF) experienced a notable intraday move, with its stock climbing 18% on Tuesday morning after a report indicated the company is engaged in active discussions about a potential acquisition by Cintas Corp. (NASDAQ:CTAS).
According to the report, Cintas resubmitted a $275-per-share takeover proposal in December. That proposed price represents a substantial premium compared with UniFirst's Monday closing price of $199.84. Following the report, UniFirst shares changed hands at $235.80 in pre-market trading.
The latest contacts between the two firms come after a sequence of earlier, intermittent acquisition attempts. Cintas originally put forward a $275-per-share offer in January 2023 but later withdrew that proposal after it was unable to engage UniFirst in what it described as "substantive" discussions.
UniFirst's chief executive, Steven Sintros, acknowledged the renewed approach during the company's most recent quarterly earnings call. He said the board was consulting with advisers to "evaluate" the proposal and to determine whether accepting it would be in the best interests of the company and its shareholders.
The report of active talks and the resubmitted offer combined to move UniFirst's share price sharply in early trading. The development marks the latest chapter in a multi-year sequence of overtures from Cintas toward a potential combination with its smaller rival.
Details to note
- Cintas is reported to have resubmitted a $275-per-share offer in December.
- UniFirst closed at $199.84 on Monday prior to the report.
- Following the news, UniFirst shares traded at $235.80 in pre-market activity.
- Cintas initially presented a $275 bid in January 2023 but withdrew that offer after failing to secure "substantive" discussions.
- UniFirst's CEO Steven Sintros said the board was working with advisers to "evaluate" the renewed proposal and assess shareholder interests.
What remains uncertain
- Whether the current discussions will result in an agreed transaction - prior outreach in 2023 did not advance due to lack of substantive talks.
- How UniFirst's board and advisers will weigh the renewed $275 proposal and whether they will recommend it as being in shareholders' best interests.
- The ultimate market reaction beyond the immediate surge in pre-market trading if talks continue or conclude.
The situation is fluid and centers on the reported renewed overture and ongoing discussions between the two companies, while UniFirst's leadership evaluates the potential path forward.